Shares of mobile ad tech company AppLovin are soaring in 2024, and many on Wall Street expect the record to continue rising in the new year. AppLovin surged 713% last year, its best performance since going public in the spring of 2021, as the Palo Alto-based company benefited from growth in online advertising and artificial intelligence. Even after its market value soared to $117 billion at Thursday’s close, Wall Street remains bullish on the Adam Foroughi-led company, with more than three-quarters of analysts holding a buy or overweight rating on the stock, according to FactSet data. The 12-month average price target implies 10% upside from current levels. APP 1Y mountain AppLovin’s stock last year “This could be just the beginning of what’s to come,” said BTIG analyst Clark Lampen. How AppLovin works AppLovin is a mobile technology company founded in 2012 and went public in 2021 through a special purpose acquisition company. “The fundamental secret that brings a lot of benefits to AppLovin is the advertising algorithm,” Lampen explained. Last year’s success stemmed from a change in 2023 to a targeting algorithm called AXON. Wedbush’s Michael Pachter noted that the changes come as Apple rolls out privacy changes to its Identification Number for Advertisers (IDFA), affecting how the company accesses user data. With the new setup, he estimates AppLovin now gets twice as much business per ad as before. That, along with the company’s continued growth in its dominance of gaming and a new e-commerce pilot program, could also help boost the stock’s performance in 2024, BTIG’s Lampen said. Expectations for 2025 Investors are anticipating another strong year for AppLovin’s stock as advertising growth and the expanding gaming market continue to boom. Bank of America recently named AppLovin a top pick for gaming and ad networks in 2025, expecting to benefit from continued growth driven by high returns on ad spend and new overall addressable market opportunities in areas such as pet supplies and auto parts. “We believe AppLovin has a unique opportunity to transform its gaming inventory into a powerful new e-commerce advertising platform,” the bank wrote. Bank of America also expects AppLovin to benefit from “constructive” feedback from its Audience+ program , a program that helps businesses connect with their audiences. The bank’s $375 price target implies a 13% upside from Wednesday’s closing price. BTIG’s Lampen also sees AppLovin’s business opportunities as a tailwind that could help the company achieve strong long-term growth. “That’s what’s bullish right now – you’re just scratching the surface of a business opportunity that could be multiples of the gaming business now or over time,” Lampone said. Analysts polled by FactSet expect 2025 Adjusted earnings per share were $6.90, up 70% from $4.07 in 2024, and revenue was $5.64 billion, up 23% from $4.59 billion last year.
AppLovin crushed it in 2024. | Real Time Headlines
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