UPDATE: Morgan Stanley Resumes AppLovin Corp (APP) at Overweight

Morgan Stanley analyst Matthew Cost resumes coverage on AppLovin Corp (NASDAQ: APP) with a Overweight rating and a price target of $35.00.

The analyst comments "While We Remain Constructive on The App Economy Through a Downturn, The Macro Challenges Are Clear... The resilience of the app economy through a macro downturn remains top of mind for investors. As we have written previously, our study of past recessions shows that spending on gaming (and recall that mobile game advertising make up the vast majority of APP's business) has been remarkably resilient through historical downturns. Engagement follows a similar trend, as we note that time spent on games grew 10% in '09 (vs. a 5% CAGR '03-'08) and reached absolute levels that were not surpassed until '15. With that in mind, we note two trends in mobile gaming: 1) mobile game download growth (a rough proxy for engagement) has remained roughly flat YTD in '22 despite the fact that 2) mobile game spending growth has trended downward over the same period. While the macro pressure on spending is clear, we do not see evidence of significant consumer behavior change and note that consumer spending comps will ease considerably next year, as the compares turn negative starting Jan '23. In other words, while we expect volatility in mobile gaming in the near term, engagement speaks to the longer term growth story."

For an analyst ratings summary and ratings history on AppLovin Corp click here. For more ratings news on AppLovin Corp click here.

Shares of AppLovin Corp closed at $19.90 yesterday.

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