AppLovin (NASDAQ: APP) stock is down 2.70% today, as the company prepares to release its Q1 earnings after the market closes. Analysts expect a strong year-over-year increase in both earnings and revenue, following a tough start to the year.
For Q1 2025, analysts project revenue of $1.38 billion, which is a 30.28% increase, and earnings per share (EPS) of $1.96. The company has surpassed expectations in each of the last two quarters, so investors are hopeful for similar results.
Jefferies maintains a Buy rating on the stock with a target price of $460. They point to strength in the gaming ad sector and success in attracting e-commerce advertisers. AppLovin has captured over 10% of the budgets from e-commerce pilot brands, making it a leading advertising channel.
Analysts’ price targets for AppLovin vary from $200 to $650, with an average target of $432.90. Piper Sandler has a target of $425, while Morgan Stanley has an Overweight rating, both praising AppLovin’s strength in mobile gaming ads and AI innovations.
On the other hand, Wells Fargo and Loop Capital noted concerns about high valuations and regulatory risks but kept their Buy ratings.
In February 2025, AppLovin sold its mobile gaming division for $900 million. This strategic shift aims to transform the company into a dedicated advertising platform.
They plan to focus on using their AI-powered AXON 2.0 platform, which helped increase advertising revenue by 73% in Q4 2024. CEO Adam Foroughi stated that selling the gaming unit allows AppLovin to grow its AI-driven ad tech solutions in e-commerce and other sectors.
The stock’s beta of 4.06 shows high volatility compared to the market. A pennant pattern observed in February 2025 suggested a potential breakout at $754, but there are key resistance and support levels at $525.15 (52-week high) and $290.
AppLovin’s shift toward AI-focused ad technology has sparked optimism for growth, though significant challenges remain. The upcoming Q1 2025 earnings report will be essential for confirming its strategic direction.
The stock has dropped 13.31% since an impressive 2024, where it gained 700%. Investors are looking for signals that APP can regain its high valuation, but the market dynamics may have changed.