Digital Turbine (NASDAQ:APPS) Stock Sees Unusually High Call Option Buying

Key Points

• Unusually high call-option activity: Investors bought 8,839 Digital Turbine call options, 171% above the average volume of 3,266. Shares fell $3.91 to $7.39 during Tuesday trading.
• Revenue outlook improved, but profit concerns remain: Fiscal Q2 revenue rose 27% year over year to $178.7 million and beat estimates; the company raised its fiscal 2027 revenue forecast to $670 million–$690 million. It kept its adjusted EBITDA outlook unchanged, with partner payouts and AI investment weighing on margins.
• Other risks include legal uncertainty: A law firm announced an investigation into potential securities-law violations; the announcement does not establish wrongdoing.

Digital Turbine, Inc. (NASDAQ:APPS - Get Free Report) was the recipient of some unusual options trading activity on Tuesday. Stock investors purchased 8,839 call options on the stock. This represents an increase of 171% compared to the average volume of 3,266 call options.

Digital Turbine Stock Performance

Shares of NASDAQ APPS traded down $3.91 during midday trading on Tuesday, hitting $7.39. 10,723,532 shares of the company's stock were exchanged, compared to its average volume of 3,839,125. The company has a quick ratio of 1.20, a current ratio of 1.20 and a debt-to-equity ratio of 1.80. The firm has a market capitalization of $894.34 million, a PE ratio of -28.30, a price-to-earnings-growth ratio of 0.49 and a beta of 3.01. Digital Turbine has a 12 month low of $2.74 and a 12 month high of $15.34. The company's 50 day moving average price is $10.59 and its 200 day moving average price is $7.68.

Digital Turbine (NASDAQ:APPS - Get Free Report) last announced its quarterly earnings results on Monday, November 9th. The software maker reported $0.18 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.17 by $0.01. The business had revenue of $178.68 million during the quarter, compared to the consensus estimate of $166.75 million. Digital Turbine had a positive return on equity of 38.34% and a negative net margin of 4.46%. As a group, analysts predict that Digital Turbine will post 0.63 earnings per share for the current fiscal year.

Wall Street Analysts Forecast Growth

Several brokerages have commented on APPS. Weiss Ratings reissued a "sell (e+)" rating on shares of Digital Turbine in a research report on Wednesday, September 2nd. Royal Bank Of Canada initiated coverage on Digital Turbine in a report on Thursday, October 1st. They issued an "outperform" rating and a $15.00 price objective for the company. Northland Securities started coverage on Digital Turbine in a research report on Thursday, October 29th. They issued an "outperform" rating and a $17.00 target price on the stock. Benchmark upped their target price on Digital Turbine from $15.00 to $16.00 and gave the stock a "buy" rating in a report on Wednesday, August 5th. Finally, TD Cowen reiterated a "hold" rating on shares of Digital Turbine in a report on Tuesday, September 29th. Six research analysts have rated the stock with a Buy rating, two have given a Hold rating and one has assigned a Sell rating to the company's stock. According to data from MarketBeat.com, the company has an average rating of "Moderate Buy" and an average price target of $15.42.

Key Stories Impacting Digital Turbine

Here are the key news stories impacting Digital Turbine this week:

• Positive Sentiment: Fiscal Q2 revenue rose 27% year over year to $178.7 million, beating estimates, while adjusted EPS of $0.18 also topped forecasts. Adjusted EBITDA increased 46% to $39.8 million. Digital Turbine Q2 results
• Positive Sentiment: Digital Turbine raised its fiscal 2027 revenue outlook to $670 million–$690 million, above the prior analyst consensus, citing AI-powered advertising, demand, international expansion and growth in its App Growth Platform. FY2027 outlook
• Neutral Sentiment: Management said AI-related declines in open-web traffic could shift advertising toward apps, presenting a potential opportunity for the company’s mobile advertising business. CEO comments on AI and advertising
• Negative Sentiment: The company kept its fiscal 2027 adjusted EBITDA outlook at $145 million–$155 million despite the higher revenue forecast. Higher partner payouts are weighing on margins, while planned AI investment adds costs. Investors appear concerned that sales growth will not translate into stronger near-term profits. Margins and market reaction
• Negative Sentiment: Block & Leviton said it is investigating potential securities-law violations related to Digital Turbine. The announcement adds legal uncertainty, though the notice does not establish wrongdoing. Securities investigation announcement

Hedge Funds Weigh In On Digital Turbine

Several institutional investors and hedge funds have recently made changes to their positions in APPS. Royce & Associates LP grew its position in shares of Digital Turbine by 107.8% during the 3rd quarter. Royce & Associates LP now owns 293,058 shares of the software maker's stock worth $3,253,000 after purchasing an additional 152,027 shares in the last quarter. Diversified Trust Co bought a new position in shares of Digital Turbine during the third quarter worth approximately $299,000. Aberdeen Group plc bought a new position in shares of Digital Turbine during the third quarter worth approximately $3,955,000. Pictet Asset Management Holding SA acquired a new stake in shares of Digital Turbine in the third quarter valued at approximately $234,000. Finally, CenterBook Partners LP acquired a new stake in shares of Digital Turbine in the third quarter valued at approximately $1,358,000. Institutional investors and hedge funds own 63.66% of the company's stock.

Digital Turbine Company Profile

Digital Turbine, Inc provides mobile technology and advertising solutions that connect app developers and advertisers with consumers through smartphones and other connected devices. Its platform supports app discovery, user acquisition, and advertising across the mobile ecosystem.

The company's services include on-device app recommendations and installation tools, as well as advertising solutions for app publishers and brands. Digital Turbine works with mobile operators and device manufacturers to deliver these services to users.

Digital Turbine expanded its mobile advertising capabilities through acquisitions, including AdColony and Fyber in 2021.

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