BofA Securities analyst Omar Dessouky reiterated a Buy rating and a $705 price forecast for AppLovin Corp (NYSE:APP) in a note released on Monday. The firm identifies e-commerce as the primary “swing factor” for the company.
AppLovin is scheduled to report first-quarter earnings on May 6.
• AppLovin stock is trading in a tight range. What’s ahead for APP stock?
Gaming Drives Immediate Sequential Growth
Management continues to highlight mobile gaming as the main engine for first-quarter sequential growth. BofA expects gaming strength to carry the majority of the quarter’s expansion.
Investor first-quarter e-commerce expectations edged lower, with a ramp expected in referral cohort spending; gaming is likely to drive most quarter-over-quarter growth, the note said.
E-commerce Scaling In The Spotlight
Analysts are looking for evidence that e-commerce is successfully scaling. BofA models a significant jump in net revenue from the “referral” cohort of advertisers. They forecast this segment to reach $90 million in the first quarter, up from $34 million in the fourth quarter. This estimate assumes an additional 2,000 advertisers went live during the quarter.
Second Half Estimates Remain Debated
While BofA maintains a “Street high” Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) forecast for 2026, the market remains divided.
The average investor estimate for 2026 e-commerce revenue sits at $1.5 billion, significantly lower than BofA's $2.1 billion projection. BofA warned that a lack of a first-half ramp could lead to second-half “estimate cuts.”
The firm's $705 price forecast is based on a 25 times enterprise value-to-calendar 2027 estimated EBITDA multiple.
APP Stock Price Activity: AppLovin shares were up 0.60% at $480.04 at the time of publication on Monday, according to Benzinga Pro data.
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