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On Thursday, Jefferies analyst James Heaney increased the price target for AppLovin Corp (NASDAQ:APP) to $530, up from the previous target of $460. The firm maintains a Buy rating on the stock, signaling confidence in the company’s future performance. With analyst targets ranging from $200 to $650 and the stock trading at $303.46, InvestingPro analysis suggests the stock is currently fairly valued based on its proprietary Fair Value model.
In his report, Heaney highlighted AppLovin’s significant year-over-year advertising revenue growth of 71%. This aligns with the company’s impressive 43.44% revenue growth and strong 75.22% gross margin reported in recent quarters, according to InvestingPro data. He noted that, despite this robust growth, the best is likely still to come. Heaney pointed out that with fewer than 1,000 web-based advertisers, AppLovin has tapped into just 0.1% of the total addressable market. The introduction of self-serve capabilities is seen as a key driver for future expansion.
Heaney also addressed the company’s second-quarter revenue guidance, which anticipates a quarter-over-quarter increase of approximately 4-5%. He suggested that this forecast might be on the conservative side, especially since it does not seem to take into account the potential benefits from the rollout of new self-serve tools.
The adjustment in the price target reflects Jefferies’ increased estimates based on their optimism about AppLovin’s growth trajectory. The analyst’s comments underscore the potential for AppLovin to significantly increase its market share by attracting more advertisers to its platform through the new self-serve options.
In other recent news, AppLovin Corp. reported impressive financial results for the first quarter of 2025, surpassing analysts’ expectations. The company achieved an earnings per share of $1.67, outpacing the anticipated $1.43, while revenue reached $1.48 billion, exceeding the projected $1.38 billion. AppLovin’s revenue increased by 40% year-over-year, and its adjusted EBITDA rose by 83%, highlighting strong financial performance. The company also announced a strategic move by signing a definitive agreement to sell its games business, aiming to sharpen its focus on advertising. Analysts from Citi and Morgan Stanley (NYSE:MS) participated in the earnings call, with discussions touching on AppLovin’s expansion into new advertising categories and the development of a self-service dashboard. The company’s strategic focus includes AI-driven advertising and expansion into web advertising, with plans to enhance ad testing and automated ad creation. AppLovin projects advertising revenue between $1 billion and $1.215 billion for the second quarter, maintaining an optimistic outlook for continued growth.
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