Advertising is a major part of the internet as a whole. It keeps a lot of sites from folding altogether. And that makes advertising technology firm AppLovin (APP) a particularly attractive play for some. In fact, in 2024, it shot up 310%, noted a CNBC report. That is putting it on the spot in terms of upcoming earnings. Concerns are starting to crop up, and AppLovin is down nearly 2% in Monday afternoon’s trading.
Thanks to that massive run-up, AppLovin is actually the best performing stock in all United States tech companies, at least, those with a market cap of $5 billion or better, noted the CNBC report. And with its earnings report coming out this week, that means a lot of very real concerns about whether or not it can produce earnings that justify that huge surge in share prices.
AppLovin started its rise three years ago, when it got a boost from the of online gaming during the pandemic. That was a good start, and AppLovin capitalized on this to connect itself to artificial intelligence (AI), a move that allowed it to take advantage of the concept to make targeting better in advertising. This commonly produces better results for said advertising, and makes customers more likely to buy in.
Like Google!
That alone might be reason enough to take interest, but another point from Wells Fargo analyst Alec Brondolo helped out as well. Brondolo currently has an Overweight rating on AppLovin, as well as a $200 price target.
Brondolo compared AppLovin to Alphabet (GOOGL), noting that AppLovin’s presence is mobile gaming is very similar to Alphabet’s Google, and its position in overall “programmatic advertising.” In fact, Brondolo noted, AppLovin may be in line for a compound annual growth rate of between 20% and 30% through 2027 thanks to the sheer size of the “mobile-game user acquisition market,” reports noted.
Is AppLovin Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on APP stock based on 12 Buys, four Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 306.85% rally in its share price over the past year, the average APP price target of $159.56 per share implies 0.99% downside risk.
