4 Reasons Why This AppLovin Analyst Is Buying The Stock

AppLovin Corporation APP, a developer of mobile games and mobile marketing software, has received a bullish recommendation from a Stifel analyst. 

The AppLovin Analyst: Analyst David Pang upgraded AppLovin shares from Hold to Buy and increased the price target from $65 to $90.

The AppLovin Takeaways: Stifel's positive stance on AppLovin shares is premised on the company's software platform segment momentum, upside from Adjust acquisition, robust pipeline of new games and a favorable outlook for the mobile ecosystem, Pang said in a note.

Competitive advantage for software platform business should continue to drive software platform segment outlook, the analyst said.

Changes to IDFA have proven to be a tailwind for the business as the value proposition for AppLovin's software suite becomes more apparent, he said. 

Related Link: HOW TO BUY APPLOVIN IPO (APP) STOCK

Revenue synergies from the Adjust acquisition should begin to contribute more meaningfully in 2022, Pang said.

This, according to the analyst, will likely accelerate the healthy underlying trends for the software platform segment with incremental revenues flowing at very high margins.

Software revenue is on pace to exceed $600 million in 2021 and improve to over $1 billion in 2022, he said, citing the company.

The company has several new mobile games slated to launch in the second-half of 2021 that have the potential to become "evergreen" titles, the analyst noted. The company's track record on growing acquired titles presents upside, Pang said. 

Stifel raised its 2021 and 2022 adjusted EBITDA estimates, reflecting increased confidence in software revenue growth,

APP Price Action: At last check, AppLovin shares were up 4.04% at $70.74. 

Related Link: Top 10 IPOs In Q2 2021: AppLovin And UiPath Lead Way, While Offering Numbers Drop