BTIG has reduced its price target for AppLovin Corp (NASDAQ:APP) to $640 from $771 but kept a Buy recommendation after reviewing the company’s fourth-quarter results and updated outlook.
The revised $640 target still implies material upside from AppLovin’s prevailing share price of $456.81, though InvestingPro data highlights that the stock is trading above its Fair Value.
On the top line, AppLovin reported fourth-quarter revenue in the roughly $1.68 billion area - a result that outperformed BTIG’s internal forecast while coming in slightly under some buy-side expectations. The company’s first-quarter guidance proved substantially stronger than anticipated, implying high single-digit quarter-over-quarter growth even when accounting for an approximately 100 basis point headwind.
AppLovin’s recent growth follows a year of significant expansion: revenue rose 98.5% over the trailing twelve months, and the company sustained gross profit margins near 79.7%.
BTIG analyst Clark Lampen pointed to improvements in AppLovin’s modeling and to new product initiatives as reasons for the firm’s constructive view on the business trajectory. In particular, prospecting campaigns have helped blunt the common month-to-month spending declines seen in legacy advertiser cohorts.
The company is also pursuing measures to reduce friction in creative production and campaign optimization, including the deployment of chatbot tools designed to make advertiser onboarding and campaign setup smoother. BTIG noted there are no present constraints preventing advertisers from being brought onto AppLovin’s Axon platform.
Independent InvestingPro analysis assigns AppLovin an overall financial health score categorized as "GREAT" with a numerical value of 3.39 and highlights a notable 48% return on assets. BTIG described the company’s approach to scaling advertiser adoption as measured and pragmatic: easing onboarding costs through credits, addressing creative burdens with AI-enabled creative tools, and tackling learning-curve obstacles using tutorials and chatbot assistance.
The downward revision to the price target reflects two primary factors identified by BTIG: multiple compression that has affected advertising and technology media telecommunications peers, and the firm’s own lowered forward estimates after incorporating 2026 quarterly projections. AppLovin continues to expect its general availability program to launch in the first half of 2026.
Separately, AppLovin reported fourth-quarter 2025 earnings that topped consensus metrics. The company posted diluted earnings per share of $3.24 versus an expected $2.96, and revenue of $1.66 billion compared with a consensus estimate of $1.61 billion. Despite the stronger-than-expected earnings and revenue print, the stock moved lower in aftermarket trading following the release.
Overall, BTIG’s updated valuation and continued Buy stance reflect a balancing of AppLovin’s robust recent operational performance and margin profile against sector-wide valuation pressures and the firm’s revised forward projections.
Key points
- BTIG lowered its price target on AppLovin to $640 from $771 but maintained a Buy rating.
- AppLovin beat BTIG’s Q4 revenue expectations and issued first-quarter guidance implying high single-digit sequential growth despite an estimated 100 basis point headwind.
- The price-target cut reflects multiple compression across advertising and technology media telecommunications names and updated estimates including 2026 quarterly modeling.
Risks and uncertainties
- Valuation risk - InvestingPro indicates the stock is trading above its Fair Value, which could limit near-term upside for equity investors; this impacts technology and advertising sector valuations.
- Multiple compression across ad-tech and TMT peers presents a valuation risk that affected BTIG’s price-target revision.
- Execution risk tied to scaling advertiser onboarding and successful rollout of Axon’s broader availability in the first half of 2026.