AppLovin (APP) shares climbed more than 12% on Wednesday.
Morgan Stanley reiterated an Overweight rating and a $720 price target for the mobile advertising firm.
Analysts identified a significant growth runway driven by potential increases in ad conversion rates.
Currently, approximately 99% of ads shown by AppLovin do not result in a conversion.
Minor improvements in these rates could drive substantial revenue and EBITDA growth.
Such gains could trigger the bank’s $1,100 bull case valuation.