AppLovin slips as BofA downgrades following weak Q3 outcomes (NASDAQ:APP)

AppLovin (NASDAQ:APP) shares slipped on Friday as funding agency Financial institution of America downgraded the cellular software program firm after it reported third-quarter outcomes, citing a scarcity of near-term catalysts.

Analyst Omar Dessouky lowered his score on AppLovin (APP) shares to impartial from purchase, together with a brand new $17 worth goal, noting that software program and app income each fell under expectations, as was EBITDA.

Dessouky lowered his 2022 EBITDA and free money circulation estimates to $1.25B and $796M, down from a earlier view of $1.6B and $1.1B respectively, “to replicate [management’s] far more cautious tone on the Q3 name.”

On the decision, AppLovin (APP) administration cited “ongoing challenges dealing with the cellular app trade” as the rationale for the shortfall in software program income, in addition to continued macro headwinds dealing with advertisers.

AppLovin (APP) shares fell 1.4% to $16.06 in premarket buying and selling.

For the third-quarter, Applovin earned 6 cents per share on $713.09M in income, in comparison with estimates of seven cents per share and $728.2M in income.

The corporate additionally tweaked its full-year outlook, because it now expects gross sales to be between $2.8B and $2.81B, down from a previous outlook of $2.84B to $3.14B and under the $2.93B consensus.

Final month Needham began protection on AppLovin (APP), noting that whereas income is anticipated to be robust the subsequent couple of years, it’s more and more prone to face “higher competitors” from a few of the largest tech corporations.

Analysts are blended on AppLovin (APP). It has a BUY score from Looking for Alpha authors, whereas Wall Avenue analysts fee it a BUY. Looking for Alpha’s quant system, which persistently beats the market, additionally charges APP a STRONG SELL.