AppLovin (APP) is expected to deliver steady growth at strong profit margins beyond the quarter on the back of its expansion initiatives, Wedbush Securities said in a note on Thursday.
The brokerage said the company maintains a strong competitive position in mobile gaming advertising and that its expansion into eCommerce and, eventually, CTV is expected to provide protection against long-term competitive pressure.
Wedbush also said AppLovin's "core gaming business continues to benefit from ongoing UA momentum" and its "AI-integrated flywheel remains exceptionally difficult for competitors to replicate at scale."
The firm noted the stock has weathered a recent short report and an active SEC inquiry without fundamental impact, and said it maintains confidence in the company's long-term strategy of perfecting its eCommerce rollout before scaling.
Wedbush maintained an outperform rating on the company's stock with a price target of $640.
Shares of AppLovin were down 1.6% in Thursday trading.
Price: $436.43, Change: $-7.01, Percent Change: -1.58%