Why Jefferies Sees More Upside Ahead for AppLovin (APP) Stock

Core Insights - AppLovin Corporation (NASDAQ:APP) is gaining attention on Wall Street, with Jefferies analyst James Heaney raising the price target to $615.00 from $560.00 while maintaining a Buy rating following a meeting with the CEO and CFO [1] Group 1: Growth Drivers - Multiple growth drivers are expected to contribute to a fourth-quarter e-commerce advertising inflection, including spending growth from existing advertisers, international audience expansion, and significant new client onboarding [2][3] - Supply expansion into non-gaming apps and in-app purchase games is identified as a meaningful growth opportunity for the company [3] Group 2: Financial Projections - The company is projected to maintain an EBITDA margin of over 80% despite significant investments [3] - FY26 revenue estimates have been raised by 2%, with projections now 6% ahead of the street, assuming approximately $2 billion in net web ad revenue, which is considered conservative [3] - Q4'24 revenue estimates have been increased by 1%, with expectations of $375 million in web-based ad revenue, of which around $170 million is anticipated from current advertisers [3]