AppLovin Corporation (APP) Named "Cash Flow Machine" by Jim Cramer

AppLovin Corporation (APP) is a "cash flow machine" according to Jim Cramer. Despite a 53% drop in mid-February and early March, the company's shares have gained 3.8% year-to-date. Cramer dismissed allegations against the firm and believes AppLovin is a good company with potential for growth.

AppLovin Corporation (NASDAQ: APP) shares rose 6.5% on July 2, 2025, following Citigroup's reaffirmation of its buy rating and $600 price target. The investment bank expects the mobile technology company to report robust Q2 2025 results, with revenue and adjusted EBITDA landing at the high end of the company's guidance range [1].

AppLovin's Q1 2025 results were impressive, with a 71% growth in its core advertising business to $1.15 billion and adjusted EBITDA jumping 92% to $943.3 million. The company's gross profit margins remain strong at 77.72%. Citigroup highlights several key areas investors should focus on, including AppLovin's eCommerce advertising initiative, the launch of self-serve tools in Q4 2025, and the impact of app store fee changes on mobile ad spending [1].

The stock is currently trading at a price-to-sales ratio of 22, which some investors may consider pricey. However, Citigroup's analysts believe AppLovin's high growth potential justifies the valuation. Other analysts have also expressed optimism, with Piper Sandler and Morgan Stanley raising their price targets to $470 and $460, respectively [1].

In addition to Citigroup's endorsement, Scotiabank initiated coverage on AppLovin with a Sector Outperform rating and a $430 price target, citing the company's strong performance metrics and competitive advantages. The firm noted AppLovin's AXON engine as a significant competitive moat and its resilience to regulatory changes [1].

Despite the positive outlook, AppLovin faces challenges such as rising competition in demand-side platforms and potential regulatory shifts. However, the company's focus on reinvestment in research and development and marketing, as well as its high gross margin level, positions it well to maintain its competitive edge [1].

Jim Cramer, a prominent financial analyst, has noted that AppLovin has "no real competition" and praised the company's AI-powered advertising platform [2]. Despite a 53% drop in mid-February and early March, the company's shares have gained 3.8% year-to-date [3]. Cramer dismissed allegations against the firm and believes AppLovin is a good company with potential for growth.

Looking ahead, AppLovin's focus on AI-powered advertising enhancements, expansion into e-commerce advertising, and strategic divestment of its mobile gaming unit are key drivers for growth [3]. The company's stock price prediction for 2025 is $465.49, with an estimated stock price of $662.40 by the end of the decade [3].

References:
[1] https://www.ainvest.com/news/applovin-surges-citi-top-pick-endorsement-71-core-ad-business-growth-2507/
[2] https://finance.yahoo.com/news/jim-cramer-says-applovin-no-084148086.html
[3] https://247wallst.com/forecasts/2025/07/18/applovin-price-prediction-and-forecast-2025-2030/