A Wall Street analyst on Tuesday pounded the table for AppLovin stock after its sharp pullback on Monday, calling it a "buying opportunity."
Oppenheimer analyst Martin Yang reiterated his outperform rating and price target of 480 on AppLovin stock.
"We believe AppLovin's 15% stock price decline on Dec. 9 (compared to a 0.6% drop in the S&P 500) presents a very good buying opportunity for one of the most exciting growth companies at a reasonable valuation," Yang said in a client note.
He added, "APP remains a top pick in our coverage."
On Monday, AppLovin stock dropped 14.7% to close at 342.54. Investors sold off shares after S&P Dow Jones Indices passed over the company for inclusion in the S&P 500 during the index's quarterly rebalancing.
On the stock market today, AppLovin stock seesawed, ending the regular session down 6.3% to 321.06.
AppLovin's software platform enables app developers to market, monetize and analyze their apps. The Palo Alto, Calif.-based company also makes mobile games such as "Wordscapes," "Matchington Mansion" and "Game of War."
AppLovin Stock Is On Two IBD Lists
AppLovin offers a valuable service for advertisers to reach consumers in mobile apps, especially games, Yang said.
"Mobile games provide longer and higher-quality attention for advertisers than other advertising channels," he said.
If AppLovin can scale its advertising product among non-gaming advertisers, it would more than double its total addressable market in the near term, Yang said. And it would see a more than 10-times expansion in the long term in the U.S. alone, he said.
"In 2024, U.S. mobile game advertising ad spend is projected to be $7.8 billion, compared to $19 billion for retail/e-commerce and $126 billion total mobile programmatic ad spend," he said.
AppLovin also has growth opportunities in facilitating e-commerce, Yang said.
AppLovin is on two IBD stock lists: Big Cap 20 and Tech Leaders.
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