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On Tuesday, Oppenheimer reiterated its Outperform rating on AppLovin Corp (NASDAQ:APP), currently trading at $384.40, with a consistent price target of $480.00. According to InvestingPro data, the stock appears overvalued despite its impressive 729% return over the past year. The firm’s analysts anticipate AppLovin to report fourth-quarter 2024 results that could surpass consensus expectations. They adopt a cautious stance ahead of the company’s earnings release scheduled for Wednesday, February 12, 2024, after market close.
AppLovin’s performance is expected to be evaluated against heightened expectations, particularly regarding its e-commerce contribution, which is predicted to be between $30 million and $50 million for the quarter. With a robust revenue growth of 41.48% in the last twelve months and an overall "GREAT" financial health score from InvestingPro, the company has demonstrated strong execution capability. This would place the total Software (ETR:SOWGn) Platform revenue at 3-5% above the consensus estimates. Positive feedback from customers on the company’s e-commerce pilot has contributed to these elevated expectations.
Despite the potential for volatile trading dynamics in the near term, AppLovin is considered Oppenheimer’s top pick within their coverage universe for the upcoming year. The firm’s analysts have expressed confidence in the company’s prospects and the positive reception of its e-commerce initiatives among customers.
Investors will be closely watching AppLovin’s upcoming earnings report to see if the company can indeed surpass the high bar set by both sell-side and buy-side expectations. The company’s performance in the e-commerce sector is particularly under scrutiny, as it is seen as a significant revenue driver that could impact the overall success of the company’s Software Platform.
In other recent news, AppLovin Corp has been the focus of various analyst firms. Benchmark initiated coverage of AppLovin with a Buy rating and a $375 price target, highlighting the potential of its AI-powered advertising platform and AXON AI technology. The firm anticipates significant growth in AppLovin’s core mobile gaming advertising business and expansion into new markets.
Meanwhile, Bank of America reaffirmed its stance on AppLovin, maintaining the company as a top pick for 2025. The firm’s optimism is rooted in AppLovin’s software growth, business performance, and potential e-commerce opportunities. On the other hand, short-seller Captain’s Log issued a report criticizing AppLovin’s business practices, arguing that its growth story is largely due to related party transactions and circular revenue.
Jefferies reaffirmed a Buy rating on AppLovin with a price target of $425, citing the company’s e-commerce initiatives and advertiser growth as reasons for optimism. The firm expects AppLovin to significantly exceed the Street’s current e-commerce revenue projections for 2025. Lastly, BofA Securities reiterated a Buy rating and a $375 price target on AppLovin, despite noting some underperformance in the company’s gaming portfolio. These are recent developments in the analyst coverage of AppLovin.
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