There’s an app for just about everything out there, so getting noticed is harder than ever. That’s AppLovin’s (NASDAQ:APP) stock in trade: getting new apps noticed and scaled up to their full potential. It’s down heavily in Thursday afternoon trading, however, and it’s all thanks to some bad news in analyst coverage.
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AppLovin landed initial coverage from Benchmark just recently, and the news from its analyst, Mark Zgutowicz, wasn’t good. Zgutowicz started AppLovin shares’ coverage with a Sell rating and also put just a $7 per share price target on the stock. The biggest problems, as Zgutowicz noted, included troubles in both the near term and the long term. In the early going, he looks for client growth to start stalling out in the first half of this year. Then, the long-term problems kick in.
Zgutowicz looks for AppLovin to have trouble catching clients, even in the mobile gaming sector. While mobile gaming should see substantial gains, AppLovin and its contemporaries won’t join in the festivities. Rather, Zgutowicz looks for platforms that don’t have first-party data to lose ground to those who do. Perhaps worse, AppLovin management is already looking to divest its mobile gaming operations, which would hurt it even further.
Zgutowicz’s view here might be extreme, as analyst consensus currently considers AppLovin a Moderate Buy. Further, with an average price target of $25.18, the stock has an upside potential of 157.07%.
