UBS upgraded AppLovin to Buy from Neutral with a price target of $145, up from $100. The analyst cites the company’s improving visibility into med-term revenue growth and a “supportive valuation” for the upgrade. AppLovin’s improved relative return on ad-spend versus competing channels is rarely seen in the digital ads space and could support 20%-30% software revenue growth from gaming alone, the analyst tells investors in a research note. The firm believes that over the medium-term, the company will start to tap into incremental growth by addressing the $140B e-commerce advertising total addressable market, and longer-term potentially license Axon 2.0 to sub-scale ad platforms.
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