Digital Turbine (APPS) AI Stock Analysis

• Market Cap: $295.07M
• Dividend Yield: N/A
• Average Volume (3M): 4.12M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.55
• Revenue Growth: -15.51%
• EPS Growth: -54.09%
• Country: US
• Employees: 754
• Sector: Technology
• Sector Strength: 40
• Industry: Software - Application
• EPS (TTM): -3.03
• Shares Outstanding: 105,006,805
• 10 Day Avg. Volume: 3,582,121
• 30 Day Avg. Volume: 4,123,495
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.76
• Price to Cash Flow (P/CF): 8.90
• P/FCF Ratio: 4.70
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $4.00
• Price Target Upside: 54.44% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Digital Turbine's stock score reflects significant financial challenges with negative profitability and cash flow issues. While technical indicators show mixed signals, valuation remains pressured due to negative earnings. However, the positive guidance and strategic focus highlighted in the earnings call provide some optimism for future improvement.

Positive Factors

Business Growth

The AGP business grew +11% Q/Q aided by strong momentum in the Brand business; the ad exchange is now able to run more 1P traffic through better integration between AdColony’s demand and Fyber’s supply, at a better margin than 3P traffic.

Financial Performance

1FQ Revenue of $118mn (+5% Q/Q) was above BofA/Street at $115mn and exceeded management’s prior expectations of sequentially flattish topline.

Technological Advancements

Alternative app store growth could positively reinforce Digital Turbine's SingleTap app install technology alongside its JV with alternative app store Aptoide.

Negative Factors

Competitive Pressure

ODS faces a long upgrade cycle and AGP faces intense competition as it tries to return to growth.

Earnings Guidance

Digital Turbine's F2Q'25 result was below expectations, and updated FY25 revenue guidance is materially lower at $480m vs consensus.

Market Conditions

The revenue miss was entirely driven by its ODS segment, which remains challenged as macro conditions drive softer mobile handset sales volumes.

Digital Turbine Business Overview & Revenue Model

Company Description

Digital Turbine, Inc., through its subsidiaries, operates a mobile growth platform for advertisers, publishers, carriers, and device original equipment manufacturers (OEMs). The company operates through three segments: On Device Media, In App Media – AdColony, and In App Media – Fyber. Its application media platform delivers mobile applications to various publishers, carriers, OEMs, and devices; and content media platform offers news, weather, sports, and other content, as well as programmatic advertising, and sponsored and editorial content media. The company also provides an end-to-end platform for brands, agencies, publishers, and application developers to deliver advertising to consumers on mobile devices; and a platform that allows mobile application developers and digital publishers to monetize their content through display, native, and video advertising. It operates in the United States, Canada, Europe, the Middle East, Africa, the Asia Pacific, China, Mexico, Central America, and South America. The company is headquartered in Austin, Texas.

How the Company Makes Money

Digital Turbine makes money through multiple revenue streams centered around its core offerings in the mobile advertising and digital content space. The company's primary revenue model involves partnerships with mobile operators and OEMs to pre-install their software on devices, which enables app recommendations and targeted advertising. This allows Digital Turbine to generate revenue through app distribution fees, user acquisition services, and advertising income. Additionally, the company benefits from revenue-sharing agreements with app developers and advertisers, who pay for enhanced visibility and targeted access to potential users. Digital Turbine's strategic partnerships with leading mobile carriers and device manufacturers significantly contribute to its earnings by expanding its reach and facilitating large-scale distribution of its solutions.

Digital Turbine Financial Statement Overview

Summary

Digital Turbine is facing financial challenges with negative EBIT and net income, highlighting unprofitability and high operating costs. Despite a positive gross profit, revenue decline and negative cash flows indicate liquidity issues. The balance sheet shows reduced leverage but declining equity, necessitating strategic adjustments.

Income Statement

Digital Turbine's income statement reflects significant challenges. The TTM data shows a negative EBIT and net income, indicating operational inefficiencies and unprofitability. The company experienced a substantial decline in revenue from the previous year, highlighting issues with revenue growth. Despite these challenges, gross profit remains positive, suggesting some capacity to cover costs if efficiency improves.

Balance Sheet

The balance sheet exhibits moderate strength with a positive equity position, indicating some financial stability. With zero total debt in the TTM period, the company has reduced leverage, which lowers financial risk. However, the declining stockholders' equity over recent periods suggests pressures on shareholder value and potential liquidity concerns.

Cash Flow

Cash flow analysis reveals significant weakness, with negative free cash flow and operating cash flow in the TTM period. This indicates that the company is not generating enough cash from operations to support its capital expenditures or sustain its operations without external financing. The negative free cash flow growth further underscores cash management challenges.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
483.58M	544.48M	665.92M	747.60M	313.58M	138.72M
	Gross Profit
243.74M	247.46M	320.23M	347.11M	132.57M	53.67M
	EBIT
-59.13M	-25.25M	46.16M	34.04M	59.21M	20.45M
	EBITDA
23.62M	54.57M	46.16M	92.24M	66.32M	15.55M
	Net Income Common Stockholders
-309.78M	-420.23M	16.67M	35.55M	54.88M	13.90M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.68M	33.60M	75.06M	126.77M	30.78M	21.53M
	Total Assets
14.96M	865.54M	1.27B	1.46B	260.37M	184.01M
	Total Debt
4.27M	383.49M	410.52M	533.28M	14.56M	19.69M
	Net Debt
2.59M	349.88M	335.46M	406.52M	-16.22M	-1.84M
	Total Liabilities
13.22M	651.61M	659.30M	942.29M	115.26M	106.56M
	Stockholders Equity
1.73M	213.93M	605.20M	514.57M	145.11M	77.45M
Cash Flow		Free Cash Flow
-38.81M	4.40M	10.60M	61.46M	53.59M	26.53M
	Operating Cash Flow
-11.38M	28.68M	15.86M	84.74M	62.80M	31.38M
	Investing Cash Flow
-37.38M	-43.85M	-9.76M	-172.00M	-37.81M	-46.72M
	Financing Cash Flow
33.22M	-29.30M	-128.29M	185.24M	-15.22M	26.18M

Digital Turbine Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.59
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For APPS, the sentiment is Negative. The current price of 2.59 is below the 20-day moving average (MA) of 3.03, below the 50-day MA of 3.56, and below the 200-day MA of 2.68, indicating a bearish trend. The MACD of -0.16 indicates Positive momentum. The RSI at 40.39 is Neutral, neither overbought nor oversold. The STOCH value of 12.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for APPS.

Digital Turbine Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRTO	73 Outperform	$1.70B	16.43	10.43%	―	-1.22%	112.13%
PERI	67 Neutral	$356.24M	30.36	1.75%	―	-32.95%	-89.11%
PUBM	67 Neutral	$435.78M	38.71	4.36%	―	9.08%	43.58%
TTD	66 Neutral	$26.85B	63.13	15.37%	―	25.63%	118.49%
MGNI	64 Neutral	$1.55B	78.15	3.10%	―	7.82%	―
Sector *	57 Neutral	$20.24B	9.51	-13.28%	2.72%	5.43%	-24.54%
APPS	50 Neutral	$295.07M	―	-101.69%	―	-15.51%	-54.09%

Digital Turbine Corporate Events

Digital Turbine Appoints New CFO Amid Financial Report

Digital Turbine announced a change in its executive team with Barrett Garrison, the Executive Vice President and Chief Financial Officer, mutually separating from the company effective February 5, 2025. Stephen Lasher was appointed as the new Chief Financial Officer, bringing extensive experience from his prior roles at Vonage and IBM. Concurrently, Digital Turbine reported its fiscal third quarter financial results for 2025, highlighting a 13% quarter-over-quarter revenue increase to $134.6 million, despite a 6% year-over-year decline. The company faced a GAAP net loss of $23.1 million for the quarter but achieved a non-GAAP adjusted net income of $13.7 million. CEO Bill Stone attributed the financial performance to strong demand for their On-Device products and growth on the App Growth Platform, leading to an improved outlook for fiscal 2025.