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On Wednesday, Jefferies analyst James Heaney adjusted the price target for AppLovin Corp (NASDAQ:APP) to $460 from a previous $600, while reiterating a Buy rating on the company's stock. With the stock currently trading at $235.28 and showing a remarkable 207% return over the past year, Heaney's assessment was based on positive feedback from checks into AppLovin's e-commerce advertising platform. InvestingPro data shows that analysts maintain a strong bullish consensus, with price targets ranging from $105 to $650. According to Heaney, advertisers participating in the pilot program managed to achieve spending levels comparable to those on YouTube and TikTok without any decline in performance.
The analyst noted that sales and conversions on AppLovin's platform are considered incremental and do not detract from other advertising platforms' performance. This is a consensus view among advertisers and the analyst alike. While Heaney pointed out that AppLovin's stock is currently trading at 16 times its forecasted FY26 EBITDA, InvestingPro analysis reveals the company's impressive 75.2% gross profit margin and strong financial health score. Get access to 18 more exclusive ProTips and detailed valuation metrics with InvestingPro's comprehensive research report.
The firm anticipates that a revenue beat in the first quarter, along with commentary on sustained revenue growth of approximately 4-5% quarter over quarter, will act as a catalyst for the stock. With a strong revenue growth of 43.4% in the last twelve months and an expected 23% growth forecast for the upcoming fiscal year, this outlook appears well-supported. The new price target of $460 implies nearly double the potential upside from the stock's current trading levels. Jefferies' outlook remains positive for AppLovin, expecting continued robust performance and growth. Discover more detailed insights and real-time updates with InvestingPro's exclusive analysis tools and expert research reports.
In other recent news, ByteDance is approaching a deadline to sell TikTok's U.S. assets to a non-Chinese buyer, as mandated by President Donald Trump. The President mentioned that a deal is near completion, though details about potential buyers remain undisclosed. Meanwhile, AppLovin Corp has expressed interest in acquiring TikTok's operations outside of China, according to a recent SEC filing. Citi analysts have maintained a Buy rating for AppLovin, with a $600 price target, noting the strategic benefits such a move could bring, despite the low probability of acquisition. Additionally, Benchmark analysts have reiterated their Buy rating on AppLovin with a price target of $525, citing the company's growth potential and leadership's commitment to transparency. AppLovin is also conducting an independent investigation into recent short report activity, emphasizing the importance of addressing misleading information. CEO Adam Foroughi has reassured stakeholders of the company's dedication to protecting its interests. These developments highlight ongoing strategic maneuvers and challenges faced by both ByteDance and AppLovin in the current market environment.
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