Analysts Keep Raving Over AppLovin: Targets Rise Post-Earnings
Advertising technology stock AppLovin (NASDAQ: APP) just reported its much-anticipated Q3 2025 earnings. Despite ups and downs, 2025 has been good to AppLovin. The company joined the S&P 500 Index in September and has since grown to a market capitalization exceeding $200 billion.
The mega-cap stock has delivered a year-to-date return of 92%. Making this run particularly impressive is that the company has shaken off multiple short reports that led to big pullbacks along the way. Below, we’ll dive into the company’s latest results and gain an updated perspective on this stock.
APP Delivers Modest Beats, Shares See a Modest Gain
For the fifth quarter in a row, AppLovin delivered beats on both the top and bottom lines. Revenues increased by 68%, reaching $1.41 billion. This exceeded the estimated $1.34 billion, representing a 60% growth rate. Earnings per diluted share grew by 96% to $2.45.
This was 11 cents better than the expected $2.34, representing 87% growth. The firm’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin also expanded. The figure moved to 82.4%, up more than 150 basis points sequentially versus 80.8% in Q2.
In Q4, the company expects to generate revenue of $1.585 billion at the midpoint, representing nearly 59% growth. This was slightly higher than the $1.55 billion, or 55% growth, anticipated. AppLovin also expects the adjusted EBITDA margin to stay between 82% and 83%. Despite these strong numbers, the company’s EPS beat was much smaller than in prior quarters.
This led to a muted reaction, with shares gaining less than 1% on Nov. 6, the day after the release. In each of the previous seven quarters, AppLovin’s shares gained by a minimum of 11.9% the day after releasing earnings.
Overall, AppLovin’s financials provided little to complain about. The firm’s ability to continue boosting its already very high margins is impressive.
Now, let’s dive into the key management commentary around the firm’s strategic initiatives.
AppLovin’s Self-Service Spend Is Climbing Exponentially
Notably, the company rolled out its self-service onboarding platform to select users on Oct. 1. The rollout appears to be going well; the company says spending among self-service advertisers is increasing by 50% each week. This is key, as the company has historically relied on employees to manually onboard clients. More clients want to join its ecosystem than the staff can handle, which has constrained growth.
The success of its self-service platform would help AppLovin maintain strong growth rates while having a limited impact on margins. Still, the self-service client base is small and is not having a meaningful impact on the overall business yet. AppLovin hopes to roll out the platform to many more clients at some point in 2026.
The company also believes that with more advertisers, its conversion rates will increase. With more options for its advertising algorithms to choose from, it can increase the chances of people buying or downloading something when they see an ad.
The firm didn’t provide any concrete numbers around its push into e-commerce advertising. However, AppLovin believes that as it continues to add more e-commerce advertisers, the effectiveness of its algorithms will improve. It will create increased ad diversity, which can improve targeting. It could also help games that primarily rely on in-app purchases expand into generating advertising revenue.
Updated Targets Eye +20% Potential in AppLovin
Analysts clearly came away with a positive feeling after AppLovin’s earnings. Overall, the MarketBeat consensus price target for the stock is just under $626, implying less than 1% upside from recent levels. However, a closer look at the price targets from analysts who issued fresh updates following the report paints a much more favorable picture.
Every analyst MarketBeat tracked raised their target on the stock. Additionally, the average target among these analysts is $759. This indicates considerable upside potential for AppLovin shares of 22%.
Overall, AppLovin continues to perform very well. The stock trades at a premium forward price-to-earnings (P/E) ratio of approximately 51x. However, its very high growth rate and margins go a long way to justify this.
The company’s continued self-service launch, e-commerce push, and potential to increase conversion provide key catalysts in 2026. Until a considerable area of weakness appears in its business or these catalysts provide underwhelming outcomes, it is hard to bet against AppLovin. Still, the stock is risky, as showing weakness could lead to a steep sell-off given the company’s valuation.
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