EU and US could reach trade deal this weekend - Reuters
On Tuesday, Jefferies maintained its strong position on AppLovin Corporation (NASDAQ:APP), currently valued at $8.1 billion in market cap, reiterating the company as its top pick with a robust price target of $460. The endorsement follows a comprehensive first-quarter mobile game advertising technology survey, which analyzed over $1.3 billion in app install spend. The survey yielded three main insights, highlighting AppLovin’s significant growth in market share and its strong performance in the ad mediation space. According to InvestingPro analysis, AppLovin appears undervalued at its current trading price of $19.88, with analysts setting targets ranging from $16 to $35.
According to the survey, AppLovin has continued to consolidate its share in ad spend, with a notable increase of 436 basis points (bps), the largest yearly gain. Additionally, the company’s mediation supply share rose by 421 bps, marking a positive trend from the previous quarter. Despite a general slowdown in 2025 ad spend growth expectations, which have been adjusted to 2.8% from the previous 7.4% amid macroeconomic concerns, AppLovin’s supply-side advertising revenue growth expectations have seen a slight improvement, now anticipating 1% year-over-year growth compared to a flat projection in the fourth quarter of 2024. While the company posted a revenue decline of 17.1% in the last twelve months, InvestingPro data shows strong gross profit margins of 74.3% and a healthy current ratio of 2.5, indicating solid operational efficiency.
The survey also shed light on the industry’s gradual shift from ad monetization to a hybrid model that includes in-app purchases. This transition was cited as a primary factor, alongside lower eCPM rates, which have been less of a concern quarter-over-quarter. AppLovin’s ecommerce efforts were also mentioned, with the majority of game developer respondents observing no impact from these initiatives, which is not considered negative. Some respondents noted an eCPM improvement, with one indicating a 10% lift in ad revenue.
Furthermore, the survey provided an early assessment of Unity Technologies’ Vector performance since its March iOS launch. While initial results indicate a slight positive impact on return on ad spend (ROAS), with some developers reporting a 7% and 5% lift respectively, the overall share shift has been limited. Unity’s demand share in 2025 increased marginally by 19 bps, while competitors like ironSource saw a decrease of 76 bps, and LevelPlay’s supply share dropped by 109 bps.
Jefferies believes it is premature to predict significant market share gains for Unity from Vector at this stage but anticipates continued monitoring of its performance following the upcoming Android launch and anticipated model improvements. Notably, a record 81% of Unity users plan to upgrade to Unity 6, indicating strong engagement with the platform’s offerings.
In other recent news, Unity Software Inc (NYSE:U). has announced several key developments that investors may find noteworthy. UBS has lowered its price target for Unity Software (ETR:SOWGn) from $30 to $22, maintaining a Neutral rating due to limited feedback on the company’s new Vector algorithm and a valuation at 18 times the estimated 2026 EBITDA. Meanwhile, JMP analysts have reaffirmed their Market Outperform rating with a $30 price target, highlighting the potential growth in the gaming industry as a positive factor for Unity Software’s financial outlook. In governance news, Unity Software disclosed the upcoming resignations of board members Michelle K. Lee and David Kostman, effective June 9, 2025, though the company stated there were no disagreements with management. Additionally, Unity Software is set to release Unity 6.1 in April, promising enhanced performance and new AI-powered workflows for game developers. The company also announced performance-based stock awards for its executives, aimed at aligning their incentives with financial targets related to revenue and adjusted EBITDA. These developments reflect Unity Software’s ongoing efforts to navigate the dynamic gaming industry and maintain strategic growth.
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