10 Unstoppable Stocks That Could Double Your Money

8. Applovin Corp. (NASDAQ:APP)

1-Year Return: 280%

Upside Potential: 110%

Number of Hedge Fund Holders: 95

AppLovin Corp. (NASDAQ:APP) operates a software platform that helps mobile app developers increase their business reach using innovative marketing tools, analytics, and monetization components. The company provides services that cover user acquisition initiatives, as well as monetisation features, performance evaluation options, and optimization capabilities. Additionally, the company operates a portfolio of mobile games under its Lion Studios brand.

On March 27, AppLovin’s stock plummeted by 20% following a report by short-seller Muddy Waters. The report accused the company’s e-commerce operations of heavy reliance on retargeting, delivering limited incremental value, as well as violating the terms of service of major digital advertising platforms. The main allegation accused AppLovin of achieving 52% e-commerce conversions from retargeted users when their actual valid sales reached 25% to 35% of the total. AppLovin disputed all accusations by calling them false and misleading information that was targeted to damage their business reputation.

Analysis from Wells Fargo analyst Alec Bonello also confirmed that AppLovin demonstrates excellent e-commerce incrementality according to their data. The research reveals that between 55% and 60% of e-commerce customers make their first purchase at the brand, which opposes claims about targeting existing customers with more than half of the ads. The report also criticised Muddy Waters’ reliance on data from only five customers, arguing that the churn observed is typical of an e-commerce business still in its early stages. The analyst reiterated an Overweight rating on the shares, with a price target set at $538.

Applovin has delivered a remarkable 280% share price return over the past year.