AppLovin’s Strong Q4 Performance and Promising Outlook Justify Buy Rating

Bank of America Securities analyst Omar Dessouky reiterated a Buy rating on AppLovin (APP – Research Report) today and set a price target of $580.00.

Omar Dessouky has given his Buy rating due to a combination of factors that highlight AppLovin’s strong performance and future growth potential. The unexpected success in Q4 was primarily driven by the Advertising segment, which outperformed expectations thanks to an eCommerce pilot and continuous improvements in the model. This resulted in a significant increase in eCommerce revenue, alongside a 7% quarter-over-quarter growth in net revenue from mobile game advertisers. Moreover, the AI Engine demonstrated its effectiveness in various eCommerce categories beyond direct-to-consumer, having a positive impact on the company’s financials.
Looking ahead, Dessouky notes that AppLovin’s management has provided conservative guidance for Q1 2025, but the company’s ongoing advancements in self-learning models for eCommerce and gaming suggest a promising outlook. The anticipated launch of a self-service solution by the first half of the year aims to broaden the reach to over 10 million global eCommerce merchants. Additionally, the valuation has been raised, reflecting the enhanced growth prospects and the significant potential within the eCommerce ad sector. These elements collectively support the Buy rating, as AppLovin is well-positioned to capitalize on its expanding total addressable market and robust demand for its services.

In another report released today, Wedbush also maintained a Buy rating on the stock with a $620.00 price target.

Based on the recent corporate insider activity of 117 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.