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Investing.com - Goldman Sachs has raised its price target on AppLovin Corp (NASDAQ:APP) to $445 from $420 while maintaining a Neutral rating following the company’s Q2 2025 earnings report. Currently trading at $390.57, the stock sits within analysts’ target range of $250-$650, with InvestingPro data showing the stock is trading above its Fair Value.
The firm cited AppLovin’s strong Advertising revenue performance after the company fully divested its Apps business in Q2, driven by continued success with its AXON 2.0 platform and scaling of its eCommerce opportunity. The company’s revenue grew 41.6% year-over-year, maintaining impressive gross profit margins of 77.7%.
Goldman Sachs noted AppLovin’s focus on executing against technology and platform tools for advertisers in the coming months, including self-serve capabilities and measurement/attribution tools, which could potentially accelerate the scaling of the advertiser base.
The research firm highlighted AppLovin’s ability to generate high incremental margins, which reached over 90% in Q2, informing Goldman’s new Adjusted EBITDA compound annual growth rate projection of approximately 40% for the 2024-2027 period.
Goldman Sachs expects near-term investor debates to center around the trajectory of AppLovin’s eCommerce business scaling in coming quarters, particularly around the Q4 holiday season and the launch of the self-serve platform. With an overall Financial Health score of "GREAT" on InvestingPro, which offers 14 additional exclusive insights and a comprehensive Pro Research Report, investors can access deeper analysis of AppLovin’s growth trajectory.
In other recent news, AppLovin Corp reported its earnings for the second quarter of 2025, revealing a notable earnings per share (EPS) beat. The company’s EPS reached $2.39, exceeding the forecasted $1.95, which marked a surprise of 22.56%. However, revenue slightly missed expectations, coming in at $1.26 billion compared to the anticipated $1.28 billion, resulting in a -1.56% surprise. Wolfe Research responded to these results by raising its price target for AppLovin to $425 from $410, while maintaining an Outperform rating. This adjustment was attributed to AppLovin’s strong revenue growth of 77%, which surpassed guidance by 4.5%, mainly driven by mobile gaming advertising. These developments reflect ongoing investor interest and analyst confidence in AppLovin’s performance and future potential.
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