Key Takeaways
- AppLovin stock is down 49% since early July to $268, including a 20% drop on August 6 after Q2 revenue of $1.92B missed the $1.94B consensus.
- The Street holds 20 buys, 7 outperforms and 6 holds, and the $497 mean target sits 85% above the price.
- TIKR’s mid-case model targets $540, a 101% gain from $268 by December 2030.
- Shares traded at a forward P/E of 21x after the miss, against a five-year average of 45x.
AppLovin Stock Lost 49% in Three Months as a Missed Quarter Reset Its Multiple
AppLovin Corporation (APP) stock has fallen 49% since early July, closing at $268 on October 2, and the damage began with a second-quarter report on August 5. Revenue of $1.924 billion missed the $1.935 billion consensus by less than 1%, and adjusted EBITDA of $1.614 billion fell short of the $1.629 billion estimate. AppLovin stock dropped 20% the next day.
A miss that small does not explain a halving, so several pressures stacked on top of it:
- Wells Fargo and Piper Sandler downgraded the stock on August 6, and BofA followed with a downgrade and a $400 target, down from $705.
- At 21 times expected earnings after the miss, the stock sat far below its five-year average of 45.
- Higher training and inference compute pushed adjusted EBITDA below the guided range, and those costs now sit inside the Q3 outlook.
- BofA analysts also questioned whether quarterly self-learning growth of 3% to 5% still applies.
CEO Adam Foroughi blamed model timing when he addressed the shortfall on the Q2 earnings call: “Our pace of meaningful model improvement was lighter than normal during the quarter and the next step-up in model performance landed just after quarter end.” That step-up is live in Q3 and management guided revenue growth of 46% to 48%, yet the stock slid from $290 on September 30 to $268 on October 2. One timing miss cut AppLovin stock’s earnings multiple to 21 from a five-year average of 45, even as revenue still grew 53% year over year.
Analysts Cut Their AppLovin Stock Target by $157 but Still See 85% Upside
The Street rates AppLovin stock at 20 buys and 7 outperforms against 6 holds, double the 3 holds it carried on June 30. The mean target fell to $497 from $654 over that stretch, which still sits 85% above the $268 close. Even the lowest of 31 price targets, $325, sits 21% higher.
TIKR Values AppLovin Stock at $540, Pricing In a Full Recovery
TIKR’s mid-case model values AppLovin at $540 by December 2030, implying 101% total return from the current price of $268, or 18% annualized over 4.2 years.
That target sits 9% above the Street’s $497 mean, so the model prices a fuller recovery than the analysts who just cut.
The target is reachable because management placed the Q2 shortfall in model timing, with the step-up now live and Q3 revenue guided to grow 46% to 48%.
TIKR’s model sees $540 by 2030. Run your own AppLovin valuation on TIKR for free →
So what is AppLovin stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what APP stock could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
