Why AppLovin (APP) Stock Is Rising Today

What happened:

Shares of mobile app advertising platform AppLovin (NASDAQ: APP ) rose 5.7% in the morning session after analyst UBS upgraded the stock from Neutral to Buy and raised its price target to $145 from $100 . The new price target implied a potential upside of 15% from where the stock traded when the upgrade was announced. The analyst added: “We’ve been excited about APP’s execution on the play opportunity for some time now … and we think (the total addressable e-commerce market) could rise above our Wall Street estimates “.

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What the market tells us:

AppLovin shares are highly volatile and have had 27 moves of more than 5% in the past year. Against that background, today’s move indicates that the market sees this news as significant, but not something that would fundamentally change its perception of the business.

The biggest move I wrote about in the past year was 7 months ago, when the stock gained 24.7% on news that the company reported fourth-quarter results with revenue, adjusted EBITDA and EPS beating Wall Street expectations. The solid performance was driven by a combination of factors, including a strong holiday season, growth in the mobile advertising market and software platform improvements. Looking ahead, guidance for Q1 2024 revenue and adjusted EBITDA were both convincingly ahead. Overall, this was a very good quarter that should please shareholders.

AppLovin is up 215% year-to-date, and at $122.15 per share, it has set a new 52-week high. Investors who bought $1,000 worth of AppLovin shares at the IPO in April 2021 would now be looking at an investment worth $1,872.

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