Deutsche Bank: AppLovin (APP.US) is leading the advertising market for mobile game users, first giving it a "buy" rating.

Deutsche Bank initiated coverage of AppLovin (APP.US) with a "buy" rating and set a target price of $705. Deutsche Bank analyst Benjamin Black stated that the company has become a "leader" in the field of mobile game user acquisition advertising. On the supply side, it holds a market share of around 80%, and on the demand side, it exceeds 55%. Black wrote: "Apart from a few closed platforms, there is no other advertising platform that can rival its over 1 billion daily active users. AppLovin has built top-tier advertising technology in the industry, and as the company grows, its performance will only get stronger. More traffic (ad spend) [provides] more information for the model [resulting in] better performance [leading to] more ad spend... So the cycle continues, creating a deeper moat." Black also noted that despite revenue growing at a compound annual rate of 68% over the past three years, AppLovin has almost added no additional costs due to the improvement in its advertising technology performance. He also mentioned positive factors such as its Axon model, expansion into e-commerce advertising, and good momentum in that field. Black added: "In the digital advertising space, we believe that AppLovin is one of the cheapest stocks relative to expected growth."