On Thursday, Stifel, a financial services firm, increased its price target on shares of AppLovin Corp (NASDAQ:APP) to $435 from the previous target of $250. Currently trading at $373.70, the stock has delivered an impressive 837% return year-to-date.
The firm has maintained a Buy rating on the stock. The adjustment reflects the analyst's confidence in the company's growth trajectory, particularly highlighting the influence of AXON 2.0 on the company's success. According to InvestingPro data, AppLovin maintains a "GREAT" financial health score of 3.52 out of 5.
AppLovin's core Software (ETR:SOWGn) Platform business is anticipated to sustain its momentum, according to the analysis, due to the unique capabilities of AXON 2.0. This platform can leverage data from AppLovin's leading mediation platform, which is seen as a significant competitive edge. The company's strong execution is reflected in its impressive 41.48% revenue growth over the last twelve months.
The company's foray into the e-commerce advertising market is also a point of optimism. Stifel's report suggests that AppLovin's expansion strategies, combined with its disciplined approach to managing costs, are likely to result in increased Adjusted EBITDA margins and stronger free cash flow (FCF) generation.
The revised price target and sustained Buy rating come after a period of scrutiny of AppLovin's growth drivers, particularly over the last year. The report indicates that the firm has made upward revisions to its estimates for AppLovin, signaling a positive outlook on the company's financial performance going forward.
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Stifel's confidence in AppLovin's ongoing expansion into the e-commerce sector, while maintaining cost discipline, is expected to contribute to the company's financial health and stock performance. The raised price target to $435 per share reflects the firm's enhanced expectations for AppLovin's market position and profitability.
In other recent news, AppLovin Corp reported significant developments. The company's third-quarter results showed a 39% year-over-year increase in revenue, reaching $1.2 billion. AppLovin also announced plans to offer senior notes to repay existing senior secured term loan facilities due in 2028 and 2030. The joint book-running managers for this transaction are J.P. Morgan Securities LLC, BofA Securities, Inc., and Morgan Stanley (NYSE:MS) & Co. LLC.
In terms of analyst ratings, Piper Sandler maintained an Overweight rating on AppLovin, while Loop Capital and Citi maintained Buy ratings. Oppenheimer also maintained an Outperform rating and raised the price target to $480. Moreover, Daiwa Securities upgraded the stock from a Neutral rating to Outperform.
AppLovin is transitioning to an all unsecured debt capital structure after acquiring investment grade ratings from S&P Global Ratings and Fitch Ratings. The company's Q4 2024 revenue is projected to be between $1.24 billion and $1.26 billion, with adjusted EBITDA expectations of $740 million to $760 million. These are some of the recent developments within AppLovin.
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