An analyst initiated coverage of the stock with a buy rating.
Shares of AppLovin (APP +5.28%), the mobile adtech company, rose sharply this morning after analyst Benjamin Black of Deutsche Bank initiated coverage of the company and put a buy rating on the stock. Black believes AppLovin’s advertising technology outpaces competitors’ systems.
AppLovin shares were up by 6% as of 12:26 p.m. ET.
Image source: Getty Images.
Best-in-class tech
Black put a $705 price target on AppLovin’s shares, which represents a significant upside of about 17% compared to the stock’s current price. The analyst says AppLovin dominates in mobile game user acquisition — with more than 1 billion daily active users — and that the company has “best-in-class” advertising technology.
Black also estimates AppLovin will have revenue growth between 20% to 30% year over year in the coming years. With the company’s strong position in the adtech space, he anticipates that AppLovin will capture an increasing portion of the e-commerce market, which will help the company diversify its revenue streams.
Today’s Change
(5.28%) $31.15
Current Price
$620.85
Key Data Points
Market Cap
$199B
Day’s Range
$606.21 – $627.00
52wk Range
$158.33 – $745.61
Volume
165K
Avg Vol
7.5M
Gross Margin
79.52%
Dividend Yield
N/A
More growth could be on the way
Investors will get more insight into how the company is doing when AppLovin reports its third-quarter results on Nov. 5. The company’s management has issued revenue guidance of $1.33 billion and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $1.08 billion, both at the midpoint of guidance.
AppLovin’s share price has already soared about 292% over the past year and, if Black’s estimates prove correct, shareholders could have more to look forward to.
Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.