(Bloomberg) — AppLovin Corp has found support from multiple Wall Street analysts who have called the recent short report related selloff a buying opportunity.
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Shares of the company fell 3.2% Thursday, notching an eighth consecutive day of declines, and putting the stock on track for its worst weekly performance since 2022. The decline, amid broader tariff-inspired weakness, came after the stock dropped 12% on Wednesday as short sellers Fuzzy Panda and Culper Research both put out contrarian reports that alleged, among other things, that AppLovin misrepresents the benefits of its AI advertising platform. In a blog post, AppLovin’s chief executive called the reports inaccurate and Wednesday night hosted a call with analysts.
Wall Street, which has long been bullish on shares of AppLovin, has come to the company’s defense, with many analysts recommending buying the stock which currently has 20 buy ratings, seven holds and no sells, according to data compiled by Bloomberg.
“We are buyers of APP following the selloff,” Piper Sandler analysts led by James Callahan wrote in a Feb. 27 note maintaining an overweight rating and $575 price target. AppLovin’s “customers are the most sophisticated in digital advertising and we believe any alleged fraudulent practice would be felt immediately via their own attribution or incrementality testing.”
Similarly, Jefferies analysts wrote in a Feb. 27 note that the claims put forth in the recent short reports are weak and “in many cases, inaccurate.” They also reiterated their buy rating and $600 price target.
“In particular, the claims of fraudulent clicks and downloads do little to explain how APP’s success comes from the company’s ability to generate measurable revenue for its customers,” analysts led by James Heaney wrote in a note dated Feb. 27. “So long as APP continues to deliver rev growth upside and remains compliant with App Store policies (as they claim), we recommend buying the stock on the recent ~35% pullback.”
AppLovin is still the top pick for Bank of America analysts led by Omar Dessouky, due to near-term catalysts such as an eCommerce ramp and its valuation, which trades at a steep discount to peers following the recent selloff.
“We would expect any complexity-driven valuation discount to dissipate over time as AppLovin‘s financial performance sustains, and new investors familiarize themselves with the mechanics of mobile adtech and its auction processes,” Dessouky wrote in a Feb. 27 note, adding that the current dislocation in shares offers an entry point for investors. Bank of America maintained its buy rating and $580 price target on shares.
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