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On Thursday, Oppenheimer analyst Martin Yang adjusted the price target for AppLovin Corp (NASDAQ:APP) to $500.00, a decrease from the previous $560.00, while maintaining an Outperform rating for the company’s stock. Yang highlighted that AppLovin’s first-quarter results dispelled concerns about a slowdown in growth due to macroeconomic factors. The company’s advertising segment saw a 16% quarter-over-quarter increase following a typically robust fourth quarter and reported an 81% adjusted EBITDA margin, which marks an improvement of 886 basis points year-over-year and 367 basis points quarter-over-quarter. According to InvestingPro data, AppLovin has demonstrated impressive revenue growth of 43.44% over the last twelve months, though current valuation metrics suggest the stock is trading above its Fair Value.
AppLovin’s management anticipates that non-gaming advertising will expand to represent over 10% of the total advertising revenue for the year. In the second quarter, the company plans to begin broader deployment of its self-serve portal to non-gaming advertisers. This move is expected to allow AppLovin to allocate more resources to bringing on additional non-gaming advertisers. The company’s strong financial position is evident in its healthy current ratio of 2.19, indicating robust liquidity to support these expansion initiatives.
Yang expressed confidence in AppLovin’s strategic direction, noting the company’s effective measures to shield itself from potential macroeconomic challenges in the U.S. market. The analyst’s remarks underscore the company’s low market penetration and high demand in the non-gaming advertising sector as key factors in its resilience.
In summary, despite the reduced price target, Oppenheimer’s view on AppLovin remains positive, with Yang commending the company’s performance and strategic focus. The adjustment of the price target to $500 from $560 reflects a recalibration of expectations while affirming the Outperform rating.
In other recent news, AppLovin Corp reported robust financial results for the first quarter of 2025, significantly surpassing analysts’ expectations. The company posted an earnings per share (EPS) of $1.67, beating the forecast of $1.43, and achieved revenue of $1.48 billion, exceeding the anticipated $1.38 billion. Following these strong results, several analysts adjusted their outlooks on AppLovin. BTIG raised its price target to $471, maintaining a Buy rating, while Jefferies increased its target to $530, also with a Buy rating. Goldman Sachs raised its price target to $435, though it maintained a Neutral rating. Analysts highlighted AppLovin’s significant year-over-year advertising revenue growth and its potential for future expansion through self-serve capabilities. The company’s strategic focus on AI-driven advertising and expansion into web advertising were noted as key drivers of its strong performance. Additionally, AppLovin’s introduction of a self-service platform is expected to provide further growth opportunities throughout the year.
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