In a report released today, Clark Lampen from BTIG maintained a Buy rating on AppLovin (APP – Research Report), with a price target of $480.00.
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Clark Lampen has given his Buy rating due to a combination of factors surrounding AppLovin’s strategic decisions and financial outlook. One significant factor is the anticipated sale of AppLovin’s first-party mobile games business to Tripledot Studios, which is expected to be finalized within the current quarter. This move allows AppLovin to recognize revenue from previously internal campaigns, potentially increasing their core advertising business revenue. The analyst anticipates a modest revenue boost from this deconsolidation, estimating an annual contribution of approximately $100 million.
Additionally, Lampen’s analysis includes adjustments to cost estimates, taking into account major expenses such as app store commissions and user acquisition costs, which have been proportionately allocated across other operating expenses. Despite a decrease in projected revenue for 2025, the EBITDA estimate has been revised upward due to a correction in the previous model. The valuation is based on a 26.5x multiple on 2026 estimated software EBITDA, with a price target set at $480, reflecting confidence in AppLovin’s strategic direction and financial management.
In another report released on May 22, Cannonball Research also reiterated a Buy rating on the stock with a $620.00 price target.