Why Jefferies Sees More Upside Ahead for AppLovin (APP) Stock

AppLovin Corporation (NASDAQ:APP) is one of the AI Stocks Gaining Attention on Wall Street. On September 4, Jefferies analyst James Heaney raised the price target on the stock to $615.00 (from $560.00) while maintaining a Buy rating. The price target raise follows meeting with AppLovin’s CEO/CFO.

Mutiple growth drivers behind an expected fourth-quarter e-commerce advertising inflection have been highlighted by the firm, which includes spend growth from existing advertisers, international audience expansion, and significant new client onboarding.

Some other meaningful growth opportunities for the company include non-gaming apps and in-app purchase games.

“Our key takes from meeting with the APP CEO/CFO: 1) There are numerous drivers behind a Q4 e-comm advertising inflection. 2) Supply expansion into non-gaming apps and in-app purchase games could be a meaningful growth opportunity. 3) Despite significant investment, APP should be able to maintain its 80%+ EBITDA margin. We raise our FY26 rev by 2% and our PT to $615. "

"Our FY26 rev is 6% ahead of street. Based on our more bullish view we are raising our web-based ad estimates. Based on spend growth from existing advertisers, international audience expansion, and significant new client onboarding, we raise our Q4’24 rev est by 1% and are 8% ahead of street. We expect $375M in web-based ad rev, of which roughly ~$170M comes from current advertisers. We also raise our FY26 rev est by 2% and are 6% ahead of street, assuming ~$2B in net web ad rev, which we still view as conservative.”

AppLovin Corporation (NASDAQ:APP) provides a leading marketing platform powered by AI technology.

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