BofA Securities kept its Buy rating and $580 price target on AppLovin (NASDAQ:APP), reaffirming confidence in the mobile ad tech company following a short-seller report that questioned its business practices and long-term viability.
Analysts responded to a recent critical report from Muddy Waters, which alleged that AppLovin faces elevated risks of being removed from major platforms like iOS, Android, or Meta, and that its flagship product Audience+ lacks differentiation and meaningful value to advertisers.
In a blog post published by AppLovin’s CEO on March 27, the company defended Audience+, asserting that its data collection practices align with industry norms and that the product complements rather than replaces existing ad channels.
After conducting its own review and consulting with an independent expert, BofA concluded that the concerns raised reflect typical competitive dynamics within the online advertising ecosystem, not structural red flags.
BofA continues to view AppLovin as a top pick in the sector, citing its rapid EBITDA growth trajectory—forecasted at a 50% compound annual rate over the next two years—and a valuation multiple of just 17x EV/2026 EBITDA, which the firm sees as undervalued.
Despite headline volatility, the bank believes AppLovin remains well-positioned for sustained expansion, supported by its tech stack, scale advantages, and ongoing innovation in ad targeting.
