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Investing.com -- Bank of America’s said concerns over a slowdown in mobile gaming ad tech are premature, with strong data pointing to a healthy demand environment.
While fourth-quarter in-app purchase data showed a sequential decline, BofA attributes this to temporary factors, including the success of Monopoly Go and increased holiday travel. Consumer engagement in gaming apps remains steady, and new game launches increased in Q4, further supporting market resilience.
BofA remains bullish on AppLovin (NASDAQ:APP), emphasizing that first-party game declines pose minimal risk, as they represent only 10% of EBITDA. APP’s ad network, driven by its AppDiscovery platform, continues to grow, with CY25 revenue estimates of 41% possibly exceeding expectations.
Unity is on track to launch a new monetization model in 2025, currently in testing. While the exact timing is uncertain, BofA expects it to boost return on ad spend (ROAS) over time once live.
BofA has a $30 price target on Unity. “We believe a discount multiple is warranted based on lower revenue visibility and profitability, partially offset by Unity's entrenched competitive position and various levers for growth,” analyst said.
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