Shares of Applovin (APP) surged from $75 to $519.75 following strong earnings and bullish analyst predictions, but have since faced pressure due to reports from short sellers. Despite a market pullback influenced by broader economic concerns, APP's impressive financial results and guidance suggest it may be undervalued at current prices. Analysts recommend considering the stock for potential buying opportunities, suggesting negative sentiment may not reflect long-term prospects. Concerns over the company's growth strategies have emerged, but experts maintain overall optimism about its future performance.
In fact, in February, the company posted EPS of $1.73, which crushed expectations of $1.25. Revenue of $1.37 billion was well above estimates of $1.26 billion.
However, with a good deal of negativity priced into the now oversold APP stock, investors may want to use that current weakness as an opportunity to buy on the cheap.
Bank of America believes even that impressive guidance is still conservative, suggesting further potential for growth despite negative sentiment.
Culper said APP's success in mobile gaming was tied to the exploitation of permissions on mobile devices, raising concerns about long-term sustainability.
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