AppLovin price target raised to $66 from $48 at Benchmark

Benchmark raised the firm’s price target on AppLovin (APP) to $66 from $48 and keeps a Sell rating on the shares. While stating that AppLovin has delivered “impressive Software Platform” momentum in the last twelve months, the firm cites five primary reasons it maintains a Sell rating. Namely, the firm expects FY25 Software Platform flow-through to adjusted EBITDA below consensus’ mid-70% estimate; it expects FY25 investment in the company’s e-commerce initiative to add unanticipated weight to margin expectations; it expects MAX-driven Software Platform gains to steadily decelerate; it believes early positive relative ROAS from testing of its closed loop ecosystem suggest limited and perhaps more balanced MAX share/economics in FY25; and the firm expects Apple (AAPL) to further tighten iOS fingerprinting restrictions enroute to their own DSP plans, which it would see “meaningfully impacting” AppLovin platform economics.