AppLovin's share price has fallen 49% over the 3 months since early July and is currently trading at $268. Both second-quarter revenue and adjusted EBITDA came in below market expectations, prompting a major reassessment of the company's valuation.
AppLovin shares have fallen 49% over the 3 months since early July, closing at $268 on 2 October. The decline followed the release of second-quarter results, with revenue of $1.924 billion coming in about 1% below the consensus estimate of $1.935 billion. The share price consequently fell 20% the following day.
Adjusted EBITDA for the quarter was $1.614 billion, below the market expectation of $1.629 billion. These figures served to reaffirm pressure on the company's growth outlook and margins.
A series of Wall Street downgrades followed. Wells Fargo and Piper Sandler downgraded the stock on 6 August, while Bank of America cut its price target from $705 to $400. The valuation consequently declined on a relative basis.
TIKR's mid-case model targets $540 by December 2030, implying about 101% upside from the current price of $268.