AppLovin Corp (NASDAQ:APP) has earned a price target raise from Wedbush analysts to $745 from $725, with an ‘Outperform’ rating, with the firm citing the company’s “phenomenal growth” and expanding ecosystem across gaming, ecommerce, and connected TV (CTV).
“AppLovin has repeatedly demonstrated that its phenomenal growth will continue for the foreseeable future, with a staggering profit margin,” the analysts wrote.
The analysts expect the company to “benefit handsomely from the ongoing momentum in gaming, as AppLovin benefits from more players and increased spending on user acquisition (UA), along with the addition of ecommerce.”
They noted that UA spend on mobile games totals more than $30 billion annually across all advertising platforms, with the share spent on third-party mobile games having “nearly tripled over the last few years to roughly $15 billion.”
“We expect the UA pie to continue growing, accelerated by the impact of the Apple vs. Epic case,” they noted.
Further catalysts include the recent international expansion and the company’s self-serve tool launch on October 1.
“Expanding internationally late Q3, and opening its self-serve tool on October 1 should drive Q4 results higher than we previously modeled,” the analysts wrote.
The analysts highlighted the strength of AppLovin’s AXON 2.0 platform. “With plenty of room for AXON and its competitors to thrive in this ecosystem, AXON 2.0 should maintain its leadership, with 20–30% annual growth easily achievable through market expansion,” they wrote.
Wedbush said it is reiterating its positive stance based on the company’s expanding high-margin pipeline.
“Given the steady pipeline of growth drivers at high margin, we reiterate our 'Outperform' rating and raise our price target to $745 from $725, based on an EV/EBITDA multiple of 34x (37x prior) on our updated 2027 EBITDA estimate, which now incorporates higher growth driven in part by the likely expansion into CTV,” the firm wrote.
Wedbush’s advisor call with industry expert Eric Seufert reinforced confidence in the company’s trajectory, the firm added.
“Our advisor, Eric Seufert, highlighted that AppLovin is taking measured steps to expand eCommerce as it is currently focused on launching the self-service tool and growing internationally,” they wrote.
While public enthusiasm may be running ahead of results, Wedbush noted Seufert’s observation that “as it shifts from larger, sophisticated advertisers to SMBs, average results may initially decline, but rise over time as the model improves and AppLovin introduces generative tools.”
“Nothing from our call leads us to anticipate a slowdown in the near- or medium-term, as AppLovin’s moat is large and it will benefit incrementally as the model expands and learns.”
Looking ahead, connected TV remains a major long-term opportunity. “The most exciting opportunity is a couple of years out, with CTV, once AppLovin has proved adept with ecommerce,” the analysts wrote.
Wedbush expects AppLovin to compete effectively in this space through strategic partnerships, noting that “Amazon is likely to be the behemoth in CTV full-funnel advertising, but AppLovin can compete with various partnerships, such as with Roku and Netflix.”
The analysts concluded that they expect 2027 to be “a transformative year.”
“We anticipate that the combination of ecommerce success, web store migration, and international expansion will drive significant growth for at least the next three years,” they wrote.