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FINWIRES

AppLovin Retains Strong Mobile Gaming Advertising Moat, Wedbush Says

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-- AppLovin (APP) retains a significant moat in mobile gaming advertising and expanding into consumer advertising and Connected TV should protect it from long-term competitive pressure, Wedbush Securities said Thursday.

The shift from e-commerce to the new consumer designation reflects a larger opportunity for AppLovin as it improves ad density, relevance, and efficiency, the brokerage said.

The company expects Q2 revenue of $1.92 billion to $1.95 billion, above Street consensus of $1.89 billion.

Wedbush highlighted three forward catalysts, including an early-stage lead-generation model in testing for fintech, insurance, and food delivery, ongoing IAP-to-hybrid conversion in mobile gaming, and early Connected TV initiatives pairing Wurl's supply with Axon's demand, according to the note.

Management reiterated that gaming continues to grow well above its long-term forecast of 20% to 30%, with no observed cannibalization from the consumer ramp, the brokerage said.

Wedbush has an outperform rating on AppLovin with a price target of $640.

Shares of AppLovin rose more than 7% in Thursday trading.

Price: $502.69, Change: $+33.86, Percent Change: +7.22%

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