EU and US could reach trade deal this weekend - Reuters
On Tuesday, Oppenheimer analysts reaffirmed an Outperform rating and maintained a $500 price target for AppLovin Corp (NASDAQ: NASDAQ:APP), representing a 24% upside from the current price of $401.91. This decision follows investor meetings with the company’s top executives, including CEO Adam Foroughi, CFO Matt Stumpf, and Head of IR David Hsiao. According to InvestingPro data, while the stock appears overvalued compared to its Fair Value, it has delivered an impressive 386% return over the past year.
The discussions covered various topics, such as game advertising growth, web advertising, competition, and supply source expansion. Analysts expressed increased confidence in AppLovin’s growth outlook and market share in the near and medium term. Supporting this optimism, InvestingPro data shows robust financial performance with a 77.7% gross profit margin and 41.6% revenue growth in the last twelve months. They noted that while growth in gross user acquisition spend is slowing, AppLovin is comfortable with a 20% annual growth rate. This is attributed to improved conversion, increased spending from publishers, and higher take-rates due to superior technology.
In terms of web advertising, management emphasized the importance of delivering quality performance and experiences to advertisers and mobile users before making self-service options publicly available. The company is focusing on creating a curated experience for mobile users with high-quality e-commerce advertisers. This strategy appears to be working, as evidenced by the company’s "GREAT" financial health score from InvestingPro, which offers 18 additional exclusive insights about AppLovin’s performance and outlook.
The management also highlighted that the machine learning model for advertising is still in its early stages, with ongoing efforts to build robust self-service tools, quality assurance, anti-fraud measures, and automation. Once these tools are established, AppLovin plans to increase its advertiser count and diversity.
AppLovin’s management remains unconcerned about competition, citing its strong position in the in-app advertising market and ad auction. The company plans to expand its supply channels, potentially as early as 2026, to include platforms like connected TV, social networking sites, music streaming, and Roblox.
In other recent news, AppLovin Corp has made several strategic moves and financial updates that are catching the attention of investors. Cannonball Research has maintained its Buy rating for AppLovin, with a price target of $620, following the company’s first-quarter results and its decision to divest its Apps business. The firm projects that AppLovin will generate $1,205 million in revenue and an Adjusted EBITDA of $976 million for the second quarter of fiscal year 2025. UBS has also increased its price target for AppLovin to $475, noting significant growth in gaming advertisement revenue and improved EBITDA margins.
Additionally, AppLovin’s sale of its first-party mobile games business to Tripledot Studios is expected to finalize this quarter, as highlighted by BTIG, which has raised its price target to $480. Jefferies, meanwhile, has reaffirmed a Buy rating with a $530 target, emphasizing upcoming discussions on AppLovin’s advertising performance. Benchmark has kept its Buy rating with a $525 target, citing the company’s focus on scalable advertising solutions and innovations like self-service tools. These developments reflect a broad consensus among analysts about AppLovin’s growth potential and strategic direction.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.