Wells Fargo has raised its price target for AppLovin, predicting a potential 30% surge in the ad-tech company’s stock after a robust first-quarter earnings report. The positive outlook comes as AppLovin announces plans to divest its mobile gaming business, further solidifying its position in the advertising market.
Key Takeaways
- Wells Fargo raises AppLovin’s price target from $386 to $405.
- The stock is expected to rise by approximately 33.5% from its previous close.
- AppLovin’s first-quarter earnings exceeded analyst expectations.
- The company plans to sell its mobile gaming business for $400 million.
- Analysts remain bullish, with 22 out of 27 recommending a buy or strong buy.
Strong Earnings Report
AppLovin’s recent earnings report showcased impressive results, beating analyst expectations in both revenue and earnings. This performance has prompted Wells Fargo analyst Alec Brondolo to revise his price target significantly, indicating strong confidence in the company’s future growth.
Strategic Business Moves
In addition to its strong earnings, AppLovin announced a strategic move to sell its mobile gaming business for $400 million. This decision is expected to allow the company to focus more on its core competencies in mobile game advertising, particularly in user acquisition and ad monetization.
Market Position and Future Outlook
Brondolo emphasized AppLovin’s strong strategic position within the $34 billion mobile game advertising market. He noted that the company is well-positioned to gain market share, especially with the upcoming global launch of its self-service platform, which is anticipated to drive further growth.
Analyst Sentiment
Despite a recent dip in stock price due to short-seller reports questioning the efficacy of AppLovin’s AI-powered advertising software, analysts remain optimistic. The stock has seen a year-to-date decline of over 6%, but it has surged more than 300% in the past year, making it one of the top performers in the tech sector.
- Current Stock Performance: AppLovin’s stock traded 15% higher in premarket trading following the earnings report.
- Analyst Ratings: According to LSEG data, 22 out of 27 analysts covering AppLovin have a buy or strong buy rating, with an average price target suggesting a potential upside of 54%.
Conclusion
Wells Fargo’s bullish outlook on AppLovin reflects confidence in the company’s strategic direction and market position. As AppLovin continues to innovate and adapt within the ad-tech landscape, investors are keenly watching for further developments that could drive stock performance in the coming months.