AppLovin Corp (APP) PT Raised to $425 at JPMorgan, 'Less Upside Than Prior Qtrs'

JPMorgan analyst David Karnovsky raised the price target on AppLovin Corp (NASDAQ: APP) to $425.00 (from $400.00) while maintaining a Neutral rating.

The analyst comments "APP reported a 2Q beat and guided 3Q ahead of the Street. Revenue growth of 9% sequentially came in ahead of the 3-5% guide, but was less upside than prior qtrs as mgmt limited onboarding of new e-commerce customers ahead of the self- serve launch. This was communicated last qtr, so it should not have come as a surprise. The big update this qtr was clarity around APP’s self-serve launch strategy. APP plans to open the self-serve platform for referrals on October 1, with a global launch in 1H26. Advertisers will also be able to buy outside the US for the first time on Oct 1, and APP plans to leverage paid marketing to recruit new advertisers after the global launch. The paid marketing strategy comes as a surprise to us given APP’s historic organic/word of mouth approach, but we think it makes sense given APP’s small base of a few thousand advertisers relative to millions of potential SMB customers. We expect the self-serve platform to be met with strong initial demand as advertisers look to deploy experimental budgets based on largely positive pilot feedback, but we have less conviction around how much e-comm scales over time. We raise our 2025 revenue by 6% and our 2025 adj. EBITDA by 5%, which reflects the 2Q beat and self-serve open to referrals in 4Q. Remain Neutral."

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