Shares of AppLovin (NASDAQ: APP) were moving higher today as the fast-growing adtech company continued to bounce back after last week’s sell-off ahead of its fourth-quarter earnings report tomorrow.
Yesterday, the stock jumped after a short-seller, CapitalWatch, retracted its accusation last month that the company was laundering money, and today it got a bullish note from Wall Street.
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As of 11:01 a.m. ET, the stock was up 2.7% on the news.
The biggest piece of news out on AppLovin was that UBS lowered its price target on the stock from $840 to $686, reflecting the stock’s recent pullback, but maintained a buy rating on the stock.
In the note, UBS said that AppLovin benefited from strong return on ad spend (ROAS) from its AI engine, Axon 2.0, as well as growing e-commerce spend and increasing advertiser adoption.
That came out one day after Jefferies reiterated a buy rating and a price target of $860 on the stock, saying that many of the recent concerns that have driven the stock lower were overblown.
Expectations seem to be improving heading into AppLovin’s fourth-quarter report, and digital advertising giants Alphabet and Meta Platforms reported strong results for their fourth quarters, showing robust advertising demand.
Analysts expect the company to report $1.61 billion in revenue, up 48.1% from the quarter a year ago, and for adjusted earnings per share to increase from $2.07 to $3.07.
Other analysts have also reported strong growth in Axon adoption, so the signs are there for a post-earnings pop in AppLovin. We’ll get the full story tomorrow afternoon when the adtech company reports earnings.
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