Digital Turbine (NASDAQ:APPS) Shares Break Above Fifty Day Moving Average - Here's Why

Key Points

• Digital Turbine shares rose 8.9% and moved above their 50-day moving average of $10.59, trading as high as $11.65.
• Fiscal Q2 revenue climbed 27% year over year to $178.7 million, beating estimates, and adjusted EPS of $0.18 topped expectations. However, higher partner payouts pressured margins and weighed on investor sentiment.
• Analysts have a consensus “Moderate Buy” rating and an average price target of $15.42, though recent rating changes include downgrades to Buy and Hold.

Digital Turbine, Inc. (NASDAQ:APPS - Get Free Report)'s share price crossed above its 50 day moving average during trading on Monday. The stock has a 50 day moving average of $10.59 and traded as high as $11.65. Digital Turbine shares last traded at $11.30, with a volume of 7,991,334 shares traded.

Digital Turbine News Roundup

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, above analyst expectations of about $166.8 million. Adjusted EPS was $0.18, also ahead of estimates, while adjusted EBITDA increased 46% to $39.8 million. Company results
• Negative Sentiment: Despite the beats, higher partner payouts squeezed margins, prompting concern about how much of the revenue growth is translating into profit. Digital Turbine reported $10.3 million in GAAP net income, while adjusted net income was $23.4 million; after-hours coverage said shares fell sharply in response to the margin concerns. After-hours reaction
• Neutral Sentiment: The recent CFO appointment adds a leadership transition as investors assess execution, cash generation and the company’s debt position. CFO transition

Analysts Set New Price Targets

A number of brokerages have weighed in on APPS. Wall Street Zen cut Digital Turbine from a "strong-buy" rating to a "buy" rating in a research report on Sunday. TD Cowen reiterated a "hold" rating on shares of Digital Turbine in a research note on Tuesday, September 29th. Zacks Research cut Digital Turbine from a "strong-buy" rating to a "hold" rating in a report on Monday, July 27th. Royal Bank Of Canada initiated coverage on Digital Turbine in a report on Thursday, October 1st. They set an "outperform" rating and a $15.00 price objective for the company. Finally, Benchmark boosted their target price on shares of Digital Turbine from $15.00 to $16.00 and gave the company a "buy" rating in a research note on Wednesday, August 5th. Six analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has given a Sell rating to the company. According to MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and a consensus price target of $15.42.

Digital Turbine Trading Up 8.9%

The company's 50-day moving average is $10.59 and its 200-day moving average is $7.68. The firm has a market cap of $1.37 billion, a price-to-earnings ratio of -43.46, a P/E/G ratio of 0.49 and a beta of 3.01. The company has a debt-to-equity ratio of 1.80, a quick ratio of 1.20 and a current ratio of 1.20.

Digital Turbine (NASDAQ:APPS - Get Free Report) last issued its quarterly earnings data on Monday, November 9th. The software maker reported $0.18 EPS for the quarter, topping analysts' consensus estimates of $0.17 by $0.01. The firm had revenue of $178.68 million for the quarter, compared to analyst estimates of $166.75 million. Digital Turbine had a negative net margin of 4.46% and a positive return on equity of 38.34%. On average, research analysts predict that Digital Turbine, Inc. will post 0.63 earnings per share for the current year.

Institutional Trading of Digital Turbine

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

About Digital Turbine

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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