Last year and so far in 2021 seem to be much more like 1999, as technology initial public offerings that made little or no money came out and rocketed higher. However, some of the glow has worn off, and some of the deals retreated to much lower price levels or traded lower right out of the chute. It was reported that some of the top hedge funds were shorting these stocks as soon as they could, and now it appears that many of the same hedge funds could be piling into the shares.
We screened our 24/7 Wall St. research database looking for backdraft trade ideas on some of the stocks that have had some wild price swings in 2021. We found four that are rated Buy across Wall Street, and that also offer stellar technologies and applications. While not suited for conservative investors, they make sense for those who are more aggressive and looking for solid ideas. It is important to remember that Facebook was cut in half after its IPO and traded down to $17. Yet, it closed recently at $332.
While all four of these stocks are rated Buy at major Wall Street firms, keep in mind that no single analyst report should be used as a sole basis for any buying or selling decision.
This stock was a disaster out of the IPO gate, as many thought it was priced too high, and it was reported that many orders were canceled the day the stock went public. AppLovin Corp. (NASDAQ: APP) is a leading provider of software to meet the demand of app developers for app discovery and app monetization.
The company’s network includes ad engagement data from over 8000 developers and reaches more than 400 million daily active users. AppLovin generates revenue from fees charged to advertisers for using its software, as well as from in-app purchases of content within its first-party apps.
BofA Securities is very positive on the shares and noted this after the company reported revenue:
Strong results in the first public quarter with revenues 8% above Street and EBITDA 5% higher; Business and Consumer revenues both accelerate. AXON having a positive impact on business; Clients up 73% year over year. Total Ad spend up 155% year over year. Platform on $600 million net ad revenue run-rate. The new Sum-of-the-Parts gives a premium to Ad Software business and peer multiple for Apps business.
The BofA Securities price target for the shares is $75, and no Wall Street consensus target was available. AppLovin stock closed on Thursday at $69.68 per share.