AppLovin shares fell almost 6% on Tuesday after Bank of America Securities cut its rating on the adtech company and lowered its price target. The move added to pressure already building since AppLovin's disappointing second-quarter earnings report last week.
AppLovin shares dropped 5.99%, closing at $318.68 after a $20.32 decline. The slide extended the fallout from the company's disappointing second-quarter earnings, published the previous week, and was sharpened by a fresh downgrade from a Bank of America analyst.
Bank of America turns neutral
Before market open, Bank of America Securities analyst Omar Dessouky changed his rating on AppLovin from buy to neutral. He also cut his price target to $400 a share from $430.
Dessouky said the company may not be able to sustain the 30% year-over-year revenue growth it has targeted over the long term. In his view, recent improvements to AppLovin's finances appeared to come mostly from engineer-directed enhancements to its gaming models rather than broader momentum. He also cast doubt on how long efficiency gains from AppLovin's AI-powered self-learning analytical capabilities can last.
Shares near their 52-week low
The stock's day's range spanned $318.12 to $329.94. That puts it near the bottom of its 52-week range of $318.12 to $745.61. Trading volume reached 8 million shares against an average of 5.9 million.
AppLovin's market capitalization stood at $113 billion, with a gross margin of 87.65%, as the stock market digested the downgrade.
Source: The Motley Fool
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