The firm established a December 2027 price forecast of $400, based on about 18 times its 2028 GAAP earnings estimate of $22.42 per share. AppLovin closed Thursday at $312.67, implying about 28% upside from that level.
AppLovin Gaming Growth Faces Durability Questions
JPMorgan called AppLovin a leading advertising technology platform for mobile gaming marketers. The company is targeting roughly 30% annual revenue growth over the longer term and adjusted EBITDA margins in the low-80% range.
However, the firm said investors are increasingly questioning how long AppLovin can sustain its rapid gaming growth. The company’s second-quarter revenue fell below the midpoint of its guidance.
Its third-quarter revenue outlook of $2.055 billion to $2.085 billion, representing 46% to 48% year-over-year growth, also fell short of investor expectations, according to JPMorgan’s conversations.
