Citi Raises AppLovin’s Price Target to $460, Sees Significant Growth Prospects in eCommerce Space
Citi has increased its price target for AppLovin Corp to $460 from $335, citing promising growth prospects in the eCommerce space. The investment bank reiterated a “Buy” rating for the marketing software firm and attributed its bullish outlook to the company’s strategic advancements in ad technology and its initial success in eCommerce advertising.
AppLovin’s leadership highlighted its optimism about boosting ad conversion rates from 1% to 5%, approaching social media platforms’ benchmarks. Citi analysts also noted that the company’s ability to monetize eCommerce ads without competitive risks could attract new advertisers beyond its traditional mobile gaming clients.
Given this backdrop of potential growth vectors, Citi is modestly raising its software revenue estimates and now falls towards the high end of the company’s targeted range of 20% to 30% annual Ad revenue growth. Despite labeling the stock as high risk due to industry volatility and execution challenges, Citi emphasized AppLovin’s robust financial profile, diverse game portfolio, and leading tech stack as mitigating factors.
As AppLovin continues to evolve from a mobile gaming-focused platform to a broader digital advertising powerhouse, its exploration into eCommerce could be a game-changer, offering significant growth opportunities in the years ahead, according to Citi.
