AppLovin (APP.US) faces panic selling, Citigroup is optimistic against the trend: stock price is severely undervalued!

On Monday, the AI application leader AppLovin (APP.US) in the US stock market plummeted nearly 12%, continuing the substantial selling trend since hitting a historical high of $510 on February 14, with a cumulative decline of over 50%. Nevertheless, Citigroup reiterated its "buy" rating and maintained a target price of $600, believing that the recent bearish reports with "false accusations" and the overall sell-off of momentum stocks are some of the reasons for this decline. Citigroup analysts, led by Jason Bazinet, wrote in their report, "Based on peer revenue growth rates, adjusted EBITDA profit margins, and equity value, AppLovin's fair value should be $550 per share." Citigroup pointed out that the current valuation implies a high probability of AppLovin equity value reaching zero, a number which Citigroup considers "exceptionally high." Citigroup attributes the market's doubts about AppLovin to the company's opaque business model behind its rapid success, rather than the validity of the bearish arguments. It is understood that the two short-selling institutions Fuzzy Panda and Culper recently jointly released a short report, accusing AppLovin of fraud and theft, alleging that the company artificially inflates ad click-through rates (CTR) through covert click inducements and click fraud, causing users to click on ads without their knowledge.