In a report released today, Matthew Cost from Morgan Stanley maintained a Hold rating on AppLovin (APP – Research Report), with a price target of $470.00.
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Matthew Cost’s rating is based on a mix of positive performance and strategic shifts at AppLovin. The company reported a strong fourth quarter, surpassing expectations in both revenue and EBITDA, with advertising revenue in particular performing well above forecasts. This robust performance reflects the company’s current strengths.
However, Cost’s Hold rating also considers structural changes within AppLovin. The firm plans to sell its first-party games business, focusing more on its ad network, which is seen as a move to streamline operations by shedding lower-margin assets. Additionally, while there is growing excitement about non-gaming ad revenue, which showed promising contributions for the first time, these developments are still in early stages. Hence, the Hold rating reflects a balance between the company’s potential and the uncertainties tied to its strategic transition.
In another report released on January 27, Goldman Sachs also maintained a Hold rating on the stock with a $335.00 price target.