AppLovin’s Strong Growth and Strategic Moves Justify Buy Rating and $600 Price Target

Analyst James Heaney CFA of Jefferies reiterated a Buy rating on AppLovin (APP – Research Report), retaining the price target of $600.00.

James Heaney CFA has given his Buy rating due to a combination of factors that highlight AppLovin’s strong performance and growth potential. The company has managed to significantly increase its advertising revenue while reducing its headcount, demonstrating efficiency and a lean operational approach. The ability for advertisers to reach 1.6 billion daily active users, up from 1.4 billion, indicates a growing user base that can drive further ad revenue growth.
Additionally, the acceleration in ad install volume growth to 50% from the previous year’s 22% showcases the effectiveness of AppLovin’s ad platform. The company’s decision to increase its share repurchase program by $500 million, especially with the stock price down, reflects a strategic use of capital that can enhance shareholder value. These factors, combined with a compelling risk-reward profile and a strong EBITDA growth trajectory, underpin the Buy rating and the $600 price target.

In another report released on February 27, Oppenheimer also reiterated a Buy rating on the stock with a $560.00 price target.

Based on the recent corporate insider activity of 114 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of APP in relation to earlier this year.