Wedbush analyst Nick McKay has maintained their bullish stance on APP stock, giving a Buy rating on February 21.
Nick McKay has given his Buy rating due to a combination of factors related to AppLovin’s strategic financial activities and the expected positive impact on the company’s earnings per share (EPS). McKay acknowledges the recent secondary offering by KKR and the concurrent share repurchase by AppLovin as a significant event. This move is seen as EPS accretive due to the reduction in the share count, which is estimated to increase EPS by about 3%. Furthermore, the repurchase reflects the management’s confidence in the company’s value and is funded through a combination of existing cash reserves and credit facilities, showcasing AppLovin’s solid financial position.
Additionally, McKay considers the changes in the ownership structure following KKR’s reduction in voting power from approximately 46% to an estimated 34%. The shift in the distribution of Class A and Class B shares as a result of the transaction is also taken into account. Despite the dilution of KKR’s voting influence, McKay maintains an OUTPERFORM rating with a 12-month price target of $67.00, underpinned by a valuation that applies a 12x EV/adjusted EBITDA multiple to the company’s forecasted adjusted EBITDA. This assessment is built on a robust financial outlook for AppLovin and the analyst’s confidence in the company’s future performance.
In another report released on February 21, BTIG also maintained a Buy rating on the stock with a $65.00 price target.
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AppLovin (APP) Company Description:
AppLovin Corp is a mobile app technology company. It focuses on growing the mobile app ecosystem by enabling the success of mobile app developers. The company’s software solutions provide advanced tools for mobile app developers to grow their businesses by automating and optimizing the marketing and monetization of their apps.
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