AppLovin garnered a positive endorsement from Citigroup, which reaffirmed its status as a top pick in light of expected strong second-quarter results. Following this news, the stock surged 6.5%. Despite a significant pullback, the stock is considered expensive with a price-to-sales ratio of 22. However, the company reported a 71% increase in its core advertising business and a 92% jump in adjusted EBITDA. Citi maintains a buy rating with a target price of $600, indicating substantial upside potential as AppLovin focuses on ad tech and explores new verticals like connected TV.
Citi's note clearly gave the stock a boost, reaffirming AppLovin as a top pick heading into its second-quarter results, expecting results at the high end of guidance.
AppLovin stock has reported 71% growth in its core advertising business to $1.15 billion, with adjusted EBITDA jumping 92% to $943.3 million in the first quarter.
Citi maintained a buy rating on AppLovin with a price target of $600, implying nearly 70% upside for the stock despite its high price-to-sales ratio of 22.
After pulling back from its peak, AppLovin remains pricey but shows robust growth potential, positioning itself to enter new verticals like connected TV.
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