AppLovin Stock Sinks 11%, but Citi Stands Firm on $600 Price Target
AppLovin (NASDAQ:APP) shares are down 11.21% to $240.15 as of 13:41 ET Monday, extending a steep sell-off that has seen the stock lose more than 50% since hitting a record high of $510 on February 14.
Despite the sharp decline, Citi Research reiterated its Buy rating and maintained a $600 price target, arguing that recent bearish reports contain "spurious claims" and that the broader sell-off in momentum stocks is playing a role in the downturn.
Warning! GuruFocus has detected 3 Warning Sign with APP.
"Based on peers' revenue growth rates, EBITDA margins, and equity values, AppLovin should be worth $550 per share," wrote Citi analysts led by Jason Bazinet. The firm noted that current valuations suggest a 50% probability that AppLovin's equity is worth $0, which Citi called "remarkably high."
Citi attributes the market skepticism to AppLovin's rapid success and its opaque business model, rather than the validity of bearish arguments against the company.
This article first appeared on GuruFocus.
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We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
