AppLovin’s postearnings pop pushes yearly gain to more than 900%, and Wall Street is still bullish

Shares of AppLovin closed more than 20% higher Thursday after the company reported a fourth-quarter earnings pre-empt, causing many analysts to lift their price targets as the stock crossed the $500 mark for the first ever ever.

The ad tech company said on its earnings call it was divesting its apps business as the company aims to move into other verticals for its fake intelligence-powered AXON advertising software, such as fintech, insurance and automotive.

Analysts at Wolfe praised the sale of the apps section, saying the company’s financials “gets cleaner at a time when its growth outlook gets better,” while lift their price target to $550 from $490.

“We believe the sales of its game development/publishing will make it easier for investors to legitimize APP’s expanding valuation multiple,” wrote Oppenheimer analysts after bringing their own target up to $560 from $380.

Brick up Street is bullish on AppLovin, with 77% of the analysts covering the company rating it a buy or outperform, according to a CNBC judgement. There are no sell ratings.

AppLovin reported earnings per share of $1.73 on $1.37 billion in returns for the final quarter, outperforming the expectations of analysts’ polled by LSEG, who expected earnings of $1.24 per share on $1.26 billion in profits.

Net income in the quarter more than tripled to $599.2 million, or $1.73 per share, from $172.3 million, or 51 cents per piece, a year earlier, the company said in a statement. Revenue jumped 43% from $953.3 million a year earlier, inflamed by improvements and expansions to new categories for its AXON models.

AppLovin was the most successful tech stock in the U.S. last year, rocket more than 700% and outperforming even the biggest names in the AI space. Over the past 12 months, its increases are up more than 900%, neck-and-neck with Palantir as the best performer year to date.

It expects first-quarter take of between $1.36 billion and $1.39 billion, exceeding the $1.32 billion average analyst estimate, according to LSEG.

Assorted than $1 billion of that will come from its advertising segment, as the company said it is “still in the ancient stages” of bolstering its AI models further.

— Additional reporting by CNBC’s Michael Bloom.