J.P. Morgan reiterates Applovin (APP.US) as a Buy: Long-term outlook promising, price target raised to $600, signaling potential for a price increase of over 100% to $600.

Investment firm Jefferies said after meeting with applovin (APP.US) executives last week that the company continues to offer investors long-term opportunities. Jefferies reiterated its "buy" rating on the stock with a price target of $600, double the current price.

Analysts led by James Heaney said in a report: "The main proof point for AppLovin customers is the incremental revenue from platform ads, which are achieved within a relatively short conversion window for AppLovin. The fact is that if the $12bn+ of ad spend on the AppLovin platform did not translate into attributable revenue for customers, those customers would quickly leave AppLovin or cease to exist. Neither of these things happened, and AppLovin's ad revenue grew 75% in 2024."

AppLovin's stock price has risen more than 8% in the past week to $292.89, rebounding from a sharp decline in the previous three weeks. The California-based company provides a software platform to enhance advertisers' digital marketing and monetization. It is also expanding into e-commerce and connected TV.

Jefferies noted that AppLovin's e-commerce advertising clients will increase their spending on the platform in 2025, driven mainly by two factors: improved ad targeting efficiency and the recruitment of more network advertisers.

Heaney said: "AppLovin emphasized that 80% of its e-commerce advertising pilot customers successfully expanded their businesses, with the goal of addressing the remaining 20% before opening up self-service to all advertisers. We expect slower advertiser growth in the first half of 2025, as manual onboarding remains, with the 2025 holiday likely being a turning point."

However, Seeking Alpha analyst Deep Value Investing recently downgraded AppLovin to "strong sell."

Deep Value Investing noted: "I expect AppLovin's stock price to continue to decline, possibly testing support around $100, despite no major changes in the company's internal operations. I believe the premium valuation in a market downturn is not sustainable. Paying 39 times operating cash flow is not reasonable compared to lower-cost competitors such as Unity (U.US)."