By Adam Levine

Digital advertising company AppLovin reports first-quarter results on Wednesday afternoon. Wall Street analysts are expecting earnings-per-share of $1.44, up 114% from last year, on revenue of $1.4 billion, up 31%.

AppLovin's questions headed into earnings are headlined by a series of short seller reports in the first quarter. AppLovin stock is down 20% since the first of those negative reports were published in February, with the S&P 500 off 6% over the same period.

AppLovin provides an ad exchange for app-makers, e-commerce, and streaming video. The short sellers have made a range of accusations related to the company's ad practices, including that they may violate the terms of the app stores from Apple and Alphabet's Google.

AppLovin has said "claims of financial and accounting improprieties are factually incorrect and have no basis whatsoever." Neither Apple nor Google has responded to the accusations.

Since February, analysts have lowered price targets, and the consensus projection is down from $542 to $472, which represents an upside of 58% from current levels. Over three-quarters of analysts have a Buy or equivalent rating, according to FactSet. Just two out of 31 analysts have a Sell or equivalent rating.

AppLovin recently agreed to sell its mobile games business to a private company for $900 million. Those apps had been eclipsed by the ad business, which grows more quickly and has higher profit margins. Investors will be looking for new details about where the deal stands.

Write to Adam Levine at adam.levine@barrons.com

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May 07, 2025 13:32 ET (17:32 GMT)

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