AppLovin (APP) is expected to deliver steady growth at strong profit margins beyond the quarter on the back of its expansion initiatives, Wedbush Securities said in a note on Thursday.

The brokerage said the company maintains a strong competitive position in mobile gaming advertising and that its expansion into eCommerce and, eventually, CTV is expected to provide protection against long-term competitive pressure.

Wedbush also said AppLovin's "core gaming business continues to benefit from ongoing UA momentum" and its "AI-integrated flywheel remains exceptionally difficult for competitors to replicate at scale."

The firm noted the stock has weathered a recent short report and an active SEC inquiry without fundamental impact, and said it maintains confidence in the company's long-term strategy of perfecting its eCommerce rollout before scaling.

Wedbush maintained an outperform rating on the company's stock with a price target of $640.

Shares of AppLovin were down 1.6% in Thursday trading.

Price: 436.43, Change: -7.01, Percent Change: -1.58