AppLovin Corp (NASDAQ:APP) shares are trading lower on Thursday after the company reported its fourth-quarter financial results, despite delivering a strong beat-and-raise quarter that exceeded Wall Street expectations.
Following the print, Wedbush defended AppLovin and significantly raised its price target, expecting outsized gains over the coming year.
Wedbush Sees Massive Upside After Earnings Sell-Off
AppLovin posted a positive fourth-quarter, with revenue of $1.658 billion — ahead of estimates and up 66% year-over-year — and adjusted EBITDA of $1.399 billion. Earnings per share of $3.24 also beat expectations. Despite the positive quarter, the stock is facing heavy selling pressure on Thursday.
Wedbush analyst Alicia Reese sees the sell-off as an opportunity as the analyst reiterated an Outperform rating and lifted the price target to $640 from $465. In a fresh note, the Wedbush analyst called AppLovin's fourth-quarter performance an "exceptional beat‑and‑raise," with revenue, EPS and adjusted EBITDA all coming in ahead of expectations. Reese said the company is headed into the future with a “staggering profit margin.”
Wedbush believes that Applovin was able to ease investor concerns with its strong performance and direct response during the conference call, although the market is saying otherwise on Thursday.
The analyst also pointed out that new verticals require substantial data ingestion and time to deliver meaningful value, suggesting the ramp could be more gradual than near‑term bulls would like. Reese argued that AppLovin can "compete at the highest scale," supported by deeply integrated AI and a hard‑to‑replicate "performance DNA."
Management guided to continued strong growth and record‑level margins, but stressed it’s "not rushing to market" and is carefully curating a highly performant product stack.
APP Stock Sinks Thursday
APP Price Action: AppLovin shares were down 19.11% at $369.50 at the time of publication on Thursday, according to Benzinga Pro.
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