AppLovin's Non-Gaming Expansion Drives Piper Sandler's Optimism
1min read Piper Sandler has expressed optimism about the upcoming first-quarter earnings report of AppLovin, a mobile software company, scheduled to be released on May 7. The firm highlighted several key areas that could boost investor confidence in the company's performance. These areas include improvements in conversion efficiency between non-gaming applications, diversification of advertisers in the e-commerce sector, refined customer segmentation, expansion of non-gaming clients, and the advancement of connected TV advertising strategies.
James Callahan, an analyst at Piper Sandler, emphasized the significance of AppLovin's expansion into the non-gaming market, which is approximately ten times larger than the gaming sector. Given AppLovin's strong presence in the gaming industry, its foray into non-gaming markets is crucial for enhancing its valuation. Callahan also noted the positive performance of the gaming business, based on verified data from multiple sources, and maintained an optimistic outlook on its growth trajectory. The analyst reiterated a "buy" rating and a target price of $425 for the stock.
The report also revealed that AppLovin may have initiated testing for a mobile application integration scheme. This innovation aims to help non-gaming advertisers direct users directly into applications rather than mobile web pages, potentially expanding the company's market reach, particularly among the Fortune 500 advertisers.
Callahan further highlighted the potential for AppLovin to focus on service-oriented advertisers, who constitute about 25% or more of the total client base. These clients are minimally affected by tariff policies, making them a strategic target for expansion. Successfully increasing the number of non-gaming advertisers could drive sustained growth in the total number of advertisers and bring in new client resources for the company.
