Can Applovin Stock Test $460?

Up about 15%, or $56.80 a share, Applovin (NASDAQ: APP) has been explosive.

Volume of 14.3 million is also well above the daily average volume of 5.76 million, thanks to earnings, continued strength in the gaming sector, and an upgraded price target.

Solid Earnings with a Bullish CEO

The company just posted EPS of $2.28, beating by 30 cents. Revenue of $1.26 billion, up 77.2% year over year, beat by $40 million.

Also, as noted by CEO Adam Arash Foroughi, as highlighted by Seeking Alpha, “continued strength in gaming advertising” is the key driver behind another strong quarter, citing improved technology, increased demand, and supply-side expansion. 

He added that “we are confident we can sustain 20% to 30% year-over-year growth driven by just gaming” and emphasized the company’s excitement about expanding outside its core market with the new AXON ads manager self-service portal.

CFO Matthew Stumpf added, “Q2 was another exceptional quarter for AppLovin. At the end of the quarter, we closed the sale of our Apps business to Tripledot Studios.” He added, “During the quarter, revenue increased by a very healthy 77% from last year to approximately $1.260 billion, while adjusted EBITDA nearly doubled to an impressive $1.020 billion, achieving an 81% adjusted EBITDA margin.”

Benchmark Analysts Just Reiterated a Buy Rating 

Analysts at Benchmark just reiterated a buy rating on the stock with a price target of $525 following the company earnings. Scotiabank raised its price target by $20 to $450, with an outperform rating. Piper Sandler raised its price target by $30 to $500 a share, with an overweight rating. All after APP posted a solid beat on earnings and with guidance.

JPMorgan raised its price target by $25 to $425 with a neutral rating. The firm also cited recent earnings and guidance as its reason for the change.