Key Takeaways
- RBC Capital cut its AppLovin price target to $500 from $575 on Oct. 28 and kept its Outperform rating. The new target is still 93% above the share price, and the stock is 64% below last December’s high.
- AppLovin trades at 14x forward earnings, against a five-year average of 25x, while analysts expect earnings to grow about 23% a year from 2026 to 2028.
- RBC’s target is about 27x today’s forward estimate, but at the stock’s 25x average it needs only about $20 a share, close to the $20.53 analysts expect for 2027.
- A rebound looks likely, but probably not all the way to $500 within a year, and the Nov. 4 third-quarter report is the next test.
AppLovin (APP) shares sit 64% below last December’s high, and the target cuts keep coming. RBC Capital’s Matthew Swanson made the latest today, lowering his target to $500 from $575 while keeping his Outperform rating.
That’s still 93% above the $259.43 share price.
The Lift That Came Late
The slide accelerated after the second-quarter report on Aug. 5. Revenue rose 53% from a year earlier, to $1.92 billion, but the gains from AppLovin’s ad models came in smaller than usual. CEO Adam Foroughi said on the call: “In this case, in Q2, we didn’t have the same amount of uplift that we normally have in any other prior quarter.”
And the push to win web and e-commerce advertisers still lacks a key tool. “We’re not at the point where we can yet get a high-quality video for 30 to 60 seconds in the hand of an advertiser out of the box,” Foroughi said.
Shares have slid as those model gains slowed, and analysts have kept trimming. UBS cut its target to $414 from $790 the same morning as RBC, pointing to slower consumer growth.
TIKR Tracks 33 Analysts on AppLovin. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on AppLovin, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See AppLovin’s Analyst Ratings
RBC Is Still a Buyer
Swanson’s $500 sits 6% above the $472 consensus target.
The case for buying rests on management’s word that the missing lift has since arrived. Foroughi said it “came right after the quarter,” adding: “that’s why Q3 has started really well, and that’s why we’ve guided strong going forward.” The guide calls for third-quarter revenue of $2.06 billion to $2.09 billion, implying growth of 46% to 48% from a year earlier.
$500 Needs AppLovin’s Multiple to Recover
Targets from the 33 analysts covering AppLovin run from $325 to $790. Their $472 average is down from $649 a year ago and $744 at its January peak:
Analysts still expect earnings to more than double between 2025 and 2028:
That’s about 23% a year from 2026 to 2028, though the 2027 estimate has slipped 5% since the end of June.
The multiple has fallen much further. AppLovin trades at 14x forward earnings, against a five-year average of 25x:
RBC’s $500 works out to about 27x the $18.56 a share analysts expect over the next twelve months. At the 25x average, though, it needs only about $20 a share, close to the $20.53 analysts expect for 2027.
Why AppLovin Stock Probably Falls Short of $500
At 14x, AppLovin is priced for far less growth than analysts expect, so a rebound looks likely. Reaching $500 within a year, though, means the multiple has to climb most of the way back to its average while estimates are still slipping. Slowing growth and a pending class action alleging AppLovin overstated how consistently its models improved keep me cautious on that timeline.
The third-quarter report on Nov. 4 is the test. Revenue near the top of guidance, and progress on that video tool, would make $500 a lot easier to reach.
So what is AppLovin stock actually worth?
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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!
