AppLovin Stock Sinks 11%, but Citi Stands Firm on $600 Price Target

AppLovin APP shares are down 11.21% to $240.15 as of 13:41 ET Monday, extending a steep sell-off that has seen the stock lose more than 50% since hitting a record high of $510 on February 14.

Despite the sharp decline, Citi Research reiterated its Buy rating and maintained a $600 price target, arguing that recent bearish reports contain "spurious claims" and that the broader sell-off in momentum stocks is playing a role in the downturn.

"Based on peers' revenue growth rates, EBITDA margins, and equity values, AppLovin should be worth $550 per share," wrote Citi analysts led by Jason Bazinet. The firm noted that current valuations suggest a 50% probability that AppLovin's equity is worth $0, which Citi called "remarkably high."

Citi attributes the market skepticism to AppLovin's rapid success and its opaque business model, rather than the validity of bearish arguments against the company.