TLDR
- AppLovin (APP) stock surged 7% Monday following Jefferies analyst defense of recent selloff
- Shares down 40% year-to-date at $406.70 but analyst sees “great buying opportunity”
- Jefferies maintains $860 price target, expects 50%+ revenue growth through FY2026
- Analyst dismisses AI competition concerns as overblown ahead of February 11 earnings
- Wall Street consensus strongly favors buying with multiple firms setting targets above $700
AppLovin (APP) stock rallied 7% Monday after Jefferies analyst James Heaney defended the mobile advertising platform’s sharp decline. Shares closed Friday at $406.70, marking a 40% drop year-to-date.
Heaney maintained his Buy rating and $860 price target on the stock. He characterized the 39% year-to-date decline as “a great buying opportunity” for growth-focused investors.
The stock has tumbled as investors worry about artificial intelligence disrupting AppLovin’s core advertising business. New tools from CloudX, Meta Audience Network, and Google Genie have sparked concerns about future competition.
Heaney pushed back against these fears. He called them “overblown risks” that have created a pricing disconnect from the company’s underlying fundamentals.
Analyst Sees Strong Growth Ahead
Jefferies expects AppLovin to deliver over 50% revenue growth by fiscal year 2026. At current prices, the stock trades at 15 times the firm’s fiscal year 2027 EBITDA estimates.
That valuation multiple appears attractive given the projected growth trajectory. Heaney’s confidence stems from proprietary research into AppLovin’s business performance.
Survey results and expert checks on both gaming and e-commerce segments came back positive. The firm expects AppLovin to beat fourth-quarter revenue estimates when it reports February 11.
Broader Wall Street Support
Jefferies isn’t alone in backing AppLovin shares. Multiple analysts have issued bullish calls on the stock despite its year-to-date decline.
Needham upgraded AppLovin to Buy with a $700 price target. The firm cited accelerating e-commerce revenue growth heading into 2026.
Piper Sandler kept its Overweight rating and $800 target. The analyst pointed to consistent growth in AppLovin’s sellers.json supply data.
Evercore ISI started coverage with an Outperform rating and $835 price target. The firm views AppLovin’s ad tech platform as dominant in mobile gaming with expanding e-commerce potential.
Benchmark maintained its Buy rating at $775. The firm downplayed AI-driven game creation as a threat to AppLovin’s business model.
The analyst consensus rating sits at 1.57, indicating strong Buy sentiment across Wall Street. InvestingPro data shows the stock’s RSI in oversold territory.
Earnings Test Coming
Investors won’t wait long for clarity on AppLovin’s business performance. The company reports fourth-quarter earnings in two days on February 11.
That report will validate or challenge Jefferies’ optimistic revenue expectations. Heaney believes surveys and channel checks support a strong quarter ahead.
AppLovin provides marketing software helping mobile app developers acquire users and monetize applications. The platform operates across gaming and e-commerce verticals.
The stock’s 39.64% year-to-date decline has created what multiple analysts view as a buying opportunity. Jefferies sees the selloff as disconnected from business fundamentals and growth prospects.
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