The stock of AppLovin (APP) is down nearly 30% over the past week after multiple short sellers accused the mobile technology company of manipulation and fraud related to its online ads. But at least one top analyst sees a buying opportunity.
Martin Yang, a top five-star rated analyst at Oppenheimer (OPY), is pounding the table on APP stock, urging investors to take advantage of the current drawdown. “We believe the recent decline in APP’s stock creates a very compelling buying opportunity for long-term investors,” wrote Yang in a note to clients. He reiterated his Buy-equivalent Outperform rating on APP stock with a $560 price target.
Yang added that he is not concerned about the allegations raised in two recent short-seller reports and feels that AppLovin CEO Adam Foroughi sufficiently addressed the issues in a lengthy blog post published on Feb. 26 that refuted the allegations made in the critical reports.
Accusations
APP stock fell 15% on Feb. 26 after short seller Fuzzy Panda published a highly critical report on the advertising technology company, alleging that AppLovin, which helps mobile game developers advertise their apps, is replicating Meta Platforms’ (META) ad targeting strategy, and also violating the terms of Google (GOOGL) and Apple’s (AAPL) app stores.
The Fuzzy Panda report comes a week after short seller Edwin Dorsey accused AppLovin of committing “advertising fraud” in his Bear Cave substack newsletter. The two reports have resulted in a big hit to APP stock, which has now declined for eight consecutive days, its longest losing steak since September 2022. But Yang is urging investors to look at AppLovin’s long-term potential and ignore the short sellers.
APP stock was one of the top-performing tech stocks in 2024, and is still up nearly 460% over the past 12 months, even with the latest pullback.
Is APP Stock a Buy?
AppLovin stock has a consensus Strong Buy rating among 19 Wall Street analysts. That rating is based on 15 Buy and four Hold recommendations issued in the last three months. The average APP price target of $539.88 implies 67.17% upside from current levels.
