AppLovin Retains Strong Mobile Gaming Advertising Moat, Wedbush Says
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%