AppLovin (APP) stock has been declining since a Bloomberg report revealed that the U.S. Securities and Exchange Commission (SEC) is investigating the mobile ad-tech platform’s data collection practices. Top Bank of America analyst Omar Dessouky remains bullish on AppLovin stock and believes that the pullback offers a buying opportunity. He reiterated a Buy rating on APP stock with a price target of $860.
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Bank of America Analyst Remains Bullish on APP Stock
According to Bloomberg, the SEC probe followed a whistleblower’s complaint and several short seller reports issued earlier this year. Dessouky thinks that the selloff following the news presents “a particularly attractive buying opportunity based on what we know today.” The 5-star analyst contends that the absence of an SEC or company disclosure and no Form 8-K filing suggest that the probe may still be “an informal, information gathering exercise,” rather than a formal investigation.
The analyst believes that AppLovin is reshaping the mobile gaming space into an effective e-commerce channel for merchants. He expects the company to deliver revenue growth of 65% in 2026, driven by e-commerce and mobile gaming advertisers. Moreover, Dessouky expects APP’s 2026 EBITDA (earnings before interest, taxes, depreciation, and amortization) to come in at $7.5 billion, 36% above the consensus estimate.
Interestingly, Dessouky expects AppLovin’s upcoming Q3 results to act as a catalyst for the stock, with updates expected on the expansion of the company’s e-commerce advertiser base and the timing of its general availability rollout.
The analyst highlighted that his $860 price target is based on a 39x EV/CY26 EBITDA valuation multiple, which continues to be attractive compared to other “rule of 40” (combined value of revenue growth rate and profit margin should exceed 40%) software peers trading around 33x.
Aside from Dessouky, Citi’s 5-star analyst Jason Bazinet also recommends buying AppLovin stock following the recent selloff.
Is APP Stock a Good Buy?
Overall, AppLovin stock scores Wall Street’s Strong Buy consensus rating based on 15 Buys and three Holds. The average APP stock price target of $664.41 indicates 15.3% upside potential from current levels. Despite the recent selloff, APP stock is still up 78% year-to-date.
