AppLovin (APP) stock has rallied nearly 293% over the past year, as the ad tech company has impressed investors with its strong performance and rapid growth. While APP stock has declined more than 14% in the past month due to its non-inclusion in the S&P 500 Index (SPX) and accusations by short-seller Casper Research, analysts remain bullish and see solid upside potential, backed by strong demand for the company’s offerings, mainly its artificial intelligence (AI)-powered AXON advertising software. They are also confident about the full rollout of AppLovin’s e-commerce ad product.
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AppLovin provides AI-enhanced solutions that enable businesses to reach, monetize, and grow their audiences. The company delivered upbeat Q1 results, with revenue growing 40% and earnings per share (EPS) surging by 149%. Moreover, investors cheered management’s decision to sell the mobile gaming business to Tripledot Studios and focus more on the profitable AI-powered ad business.
Analysts See Attractive Upside Potential in AppLovin Stock
Recently, Jefferies analyst James Heaney reiterated a Buy rating on APP stock with a price target of $530, stating that it remains one of the Top Picks for his firm. The 5-star analyst believes that AppLovin is well-positioned heading into 2026, as its e-commerce ad product moves towards general availability. Heaney noted that recent updates on AppLovin’s beta platform revealed that the product will be more broadly available starting next year, marking the first time that the company has publicly communicated a timeline for a broader rollout.
In fact, Heaney mentioned the possibility of AppLovin lowering its current $10 million gross merchandise value (GMV) limit for participation ahead of the e-commerce ad product’s full launch, which he believes would widen access and accelerate adoption. The analyst noted the pullback in APP stock over the past month due to factors such as index exclusion, short seller Casper Research’s report, and delayed product adoption. That said, he contends that these factors do not present any long-term fundamental concerns.
Heaney sees valuation support, with AppLovin shares now trading at 19x Fiscal 2026 EBITDA estimate, well below the company’s projected 38% four-year EBITDA compound annual growth rate (CAGR). Overall, the analyst views the general availability (GA) rollout of the self-serve ad tools as a major catalyst for APP stock.
Like Heaney, UBS analyst Chris Kuntarich is also bullish on AppLovin. He recently boosted AppLovin’s stock price target to $540 from $475. The 4-star analyst contends that APP stock is worth a richer valuation due to its high margins and use of AI to boost efficiency. Kuntarich believes that AppLovin stock should be valued at 30x the Fiscal 2026 EBITDA estimate rather than 28x. Despite near-term headwinds, including a slower-than-anticipated e-commerce advertiser ramp and index exclusion, the analyst remains optimistic about APP stock, as checks indicate that the company’s performance continues to be “best-in-class” for gaming and is comparable to that of social media giant Meta Platforms (META) in e-commerce.
Is AppLovin Stock a Buy?
Overall, Wall Street has a Strong Buy consensus rating on AppLovin stock based on 15 Buys and three Holds. The average APP stock price forecast of $515.69 indicates an attractive upside potential of about 51% from current levels.
