Shares of AppLovin (APP +5.14%), the mobile adtech company, rose sharply this morning after analyst Benjamin Black of Deutsche Bank initiated coverage of the company and put a buy rating on the stock. Black believes AppLovin's advertising technology outpaces competitors' systems.
AppLovin shares were up by 6% as of 12:26 p.m. ET.
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Best-in-class tech
Black put a $705 price target on AppLovin's shares, which represents a significant upside of about 17% compared to the stock's current price. The analyst says AppLovin dominates in mobile game user acquisition -- with more than 1 billion daily active users -- and that the company has "best-in-class" advertising technology.
Black also estimates AppLovin will have revenue growth between 20% to 30% year over year in the coming years. With the company's strong position in the adtech space, he anticipates that AppLovin will capture an increasing portion of the e-commerce market, which will help the company diversify its revenue streams.
NASDAQ: APP
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More growth could be on the way
Investors will get more insight into how the company is doing when AppLovin reports its third-quarter results on Nov. 5. The company's management has issued revenue guidance of $1.33 billion and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $1.08 billion, both at the midpoint of guidance.
AppLovin's share price has already soared about 292% over the past year and, if Black's estimates prove correct, shareholders could have more to look forward to.
