AppLovin Stock Momentum Builds With $800+ Analyst Price Target

Over the past 52 weeks, ad-tech stock AppLovin (NASDAQ: APP) has been among the biggest standouts in the market. Year-to-date, shares are up by a staggering 457%. That performance ranks in the top ten best among U.S. large-cap stocks.

The latest surge in AppLovin shares comes as several Wall Street analysts have just grown much more bullish on this name. The stock is up by over 11% when combining gains on Sept. 26 and Sept. 29. Below, we’ll break down the landscape of analyst forecasts on AppLovin. We’ll also detail the analyst price targets that led to the recent rise in shares and provide perspective on AppLovin’s future.

Late September Price Targets: APP Moves From 22% Downside to 7% Upside Potential

Right off the bat, looking at the MarketBeat consensus price target on AppLovin may cause investors some concern. Currently, the figure sits at just under $554. This implies that shares could fall by around 22% from their Sept. 29 closing price of around $712. However, the most recent targets on this stock are also the most optimistic. This is a solid bullish indicator, showing that those incorporating the most recent information see the most upside.

Take the difference in MarketBeat tracked price targets issued in August versus September as an example. Among those analysts who issued updates in August, the average target is just $465, suggesting that AppLovin is in store for a huge 35% correction. On the other hand, price targets updated in September average out to $705. This implies downside of 1%, demonstrating the huge difference one month made in analysts' forecasts.

Further crystallizing the recent bullish shift in analyst sentiment are price targets released in the second half of September. Analysts at Oppenheimer, Piper Sandler, and UBS have issued $740, $740, and $810 price targets, respectively. Overall, the average of these targets is $763, implying shares could gain by around 7%. This flips the deeply bearish story implied by the consensus target to one with a bullish tilt. UBS’s exceptionally bullish forecast suggests around 14% upside in AppLovin shares.

Early Self-Service Launch Sends Price Targets Skyrocketing

A significant reason for AppLovin’s soaring price targets is the early release of its self-service onboarding platform to international customers. Historically, AppLovin has been onboarding customers to its AppDiscovery and MAX platforms manually. Despite the firm’s software revenues growing at 77% last quarter, this manual process has somewhat limited growth. To solve this problem, the company has been developing a process by which customers can onboard themselves.

Originally, the company said that this service would not begin rolling out until Oct. 1. However, on Sept. 10, the company said it had already released the service, noting that it was “three weeks ahead of schedule." They also said that the early results were "phenomenal." This is an important development for multiple reasons.

First off, it shows AppLovin’s ability to demonstrate better-than-expected execution on its key objectives, providing confidence in the management team. Additionally, the self-service platform can benefit growth and margins. This comes as new customers can join the platform faster, and AppLovin doesn’t need to hire a proportional number of employees to make this happen.

AppLovin’s Outlook: Price Targets Could Move Even Higher

Surely, 7% isn’t an amount of upside potential that would elicit a high degree of excitement from many investors. However, in the context of AppLovin’s hyperbolic gains, it provides evidence that the momentum in this name can continue. Additionally, there is a significant chance that targets may move even higher.

Since Nov. 2024, MarketBeat has not tracked a single analyst who lowered their price target on AppLovin. With the company giving markets little reason to doubt it, it is possible this trend could continue. Notably, AppLovin shares have gained 12% or more the day following its earnings release in 11 out of the last 12 quarters.

Broad success of AppLovin’s self-service platform and its push into e-commerce advertising are two key catalysts that could help push shares higher. E-commerce is a much larger and under-penetrated market compared to AppLovin’s current mobile game advertising market. Still, these potential catalysts remain in their relatively early stages. Shares have also gained 56% since the company’s last post-earnings surge. Thus, markets may need to exercise patience to avoid a sell-off after the firm’s next earnings release, which is set for early November. However, until the company shows that expectations are too high, the bull case for AppLovin remains intact.

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The article "AppLovin Stock Momentum Builds With $800+ Analyst Price Target" first appeared on MarketBeat.