AppLovin (APP) is sinking 11% but well off its lows of the day after two short sellers released negative reports about the firm. The company, which assists app developers with marketing their offerings, had been down 23% this morning.

Separately, investment bank Loop Capital on Feb. 20 meaningfully raised its price target on APP.

What the Short Sellers Said About APP

Fuzzy Panda and Culper Research contended that APP is not honest about the capabilities of its AI ad platform. They also alleged that the company forces users to install apps on their phones in order to increase its revenue.

Loop Capital Was Upbeat on APP Stock

The investment bank raised its price target on APP to $650 from $450. Loop reported that advertisers were pleased with APP, and it thinks that the company's financial health is strong. It kept a Buy rating on the name.

More Information About APP

Analysts on average expect the firm to generate earnings per share of $8 this year, up from $5.69 in 2024. The mean outlook calls for revenue of $5.8 billion in 2025, up from $4.7 billion in 2024.

The shares are changing hands at a forward price-to-earnings ratio of 54.6 times.

In the last month, the stock is down 9.4%, while it has risen 1% in the last three months. In the last year, it has jumped 472%.

While we acknowledge the potential of APP, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than APP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.