AppLovin (APP) Rated Outperform by RBC on Performance Advertising Strength

AppLovin Corporation (NASDAQ:APP) ranks among the stocks with the best earnings growth for the next 5 years.  With an Outperform rating and a $700 price target, RBC Capital Markets began coverage of AppLovin Corporation (NASDAQ:APP) on October 14 owing to the company’s platform positioning in performance advertising and marketing technologies.

Analysts emphasized AppLovin’s focus on attribution and return on ad spend (ROAS), claiming that this enables advertisers to redirect their expenditures from general marketing budgets to quantifiable results. RBC dubbed this an “unlimited total addressable market,” adding that as long as ROAS requirements are met, spending is expected to continue.

The company’s split of its apps business has pushed its platform beyond mobile games into e-commerce, notably direct-to-consumer (DTC) companies. RBC claimed this diversification should support greater pricing and revenue durability, while the mostly fixed-cost approach allows top-line gains to trickle through to profitability and free cash flow.

AppLovin Corporation (NASDAQ:APP) is a software-based advertising and app monetization company. It operates through two segments, Advertising and Apps. The company also develops and publishes free-to-play mobile games through its studios and partners.

While we acknowledge the potential of APP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 10 Best Magic Formula Stocks for 2025 and 10 Best Retirement Stocks to Buy According to Hedge Funds.

Disclosure: None. This article is originally published at Insider Monkey.