BofA Securities on AppLovin: 'Current valuation appears reasonable'

BofA Securities analyst Omar Dessouky reiterated a Buy rating and $705.00 price target on AppLovin Corp (NASDAQ: APP), according to a press release statement.

Dessouky noted that AppLovin's eCommerce footprint expanded at a slower pace in June, adding approximately 750 new pixels compared to roughly 950 net additions in May, with merchant count reaching approximately 8,300.

The analyst said weekly data has not shown a clear uptick since AppLovin opened to all eCommerce advertisers on June 22, indicating a muted general availability start. Installs and uninstalls both rose in the first week after launch, which the analyst attributed to advertisers actively testing the platform.

Dessouky noted that Northbeam data, which skews toward larger advertisers, points to a month-over-month loss in AppLovin's wallet share in June, while Haus data showed wallet share remaining steady.

The analyst described current valuation as appearing reasonable at 17x CY27 EBITDA, with the gaming segment alone capable of growing more than 20% year-over-year. Dessouky also noted near-term risk that AppLovin shares could be used as a funding short for Unity bulls until clearer general availability adoption data emerges.

Shares of AppLovin Corp closed at $506.98.

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