Digital Turbine Inc: APPS Stock Up 277% in 2019, Still Has Massive Potential

Digital Turbine Inc Stock Is Up
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Digital Turbine Stock Has Soared 81% Since the May Sell-Off

Digital Turbine Inc (NASDAQ:APPS) is an off-the-radar technology penny stock that is having one of the best years on Wall Street. Digital Turbine stock is up 277% since the start of 2019 and it has advanced an eye-watering 365% over the last year.

In May, the stock market experienced a sell-off, and in early August, stock prices swooned a couple of times on fears of a recession and the long-term effects of the China/U.S. trade war. The S&P 500 is down 1.1% and the tech-heavy Nasdaq is down 1.7% over that same time frame.

Meanwhile, APPS stock has bucked the trend, soaring 81.5%.

Why has Digital Turbine been blowing away the market? Thanks to strong financial results, a robust balance sheet, and strong guidance, 2019 has been a breakout year for the company. And there is no reason to think that the momentum is going to slow down any time soon.

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Sure, Digital Turbine stock is up 365% so far this year, but it still has plenty of room to run. In fact, I’ve been bullish on this tech penny stock since the start of the year and I continue to believe it is a multibagger opportunity.

Digital Turbine Inc Overview

Digital Turbine provides Internet software that helps companies connect with their target audiences. The company’s mobile advertising platform “Ignite” comes pre-installed by some of the biggest telecommunications companies. (Source: “Canaccord Genuity 39th Annual Growth Conference August 2019,” Digital Turbine Inc, last accessed August 20, 2019.)

If you’ve ever noticed a new app on your phone you didn’t download, chances are it’s because of Ignite. Companies like this kind of service because it makes it easier for you, the consumer, to find their apps.

To date, Digital Turbine’s products have been adopted by more than 40 mobile operators and original equipment manufacturers (OEMs) worldwide, delivering more than 2.3 billion app preloads on more than 300 million devices—in 190 countries for tens of thousands of advertising campaigns.

Right now, 70% of the top-grossing apps on “Google Play” work with Digital Turbine.

In the June quarter, Digital Turbine Inc’s mobile delivery platform was installed on more than 30 million devices, leading to the total of 300 million. That’s a lot, but it’s just the beginning, representing just about 10% of the addressable global “Android” smartphone market.

APPS Stock Information
Market Cap $576.0 Million
52-Week Change 364.1%
52-Week High $6.98
52-Week Low $1.12
Shares Outstanding: 83.0 Million
Float 63.0 Million
50-Day Moving Average: $5.55
200-Day Moving Average: $4.13

(Source: “Digital Turbine, Inc. (APPS),” Yahoo! Finance, last accessed August 20, 2019.)

Digital Turbine stock has been crushing the market for the last year, rising by 365%. Unlike the rest of the stock market, which has stumbled more than once since the beginning of May, APPS stock has trended higher.

Thanks to strong first-quarter financial results and an encouraging outlook, Digital Turbine shares should continue to gain ground in 2019, with that momentum carrying into 2020.

Chart courtesy of StockCharts.com

Q1 Revenue Up 38%, Swings to Adjusted-Net-Income Profitability

On August 5, Digital Turbine Inc announced that its revenue, for the first quarter of 2020 (ended June 30, 2019) increased 38% year-over-year to $30.6 million. U.S. revenue per device increased more than 30%, illustrating the ongoing demand from advertisers for Digital Turbine’s platform. (Source: “Digital Turbine Reports Fiscal 2020 First Quarter Results,” Digital Turbine Inc, August 5, 2019.)

In the quarter, the company reported a net loss of $1.7 million ($0.02 per share), compared to net income of $1.5 million ($0.02 per share) in the same prior-year period. Adjusted net income came in at $4.2 million ($0.05 per share), compared to an adjusted net loss of $0.6 million ($0.01 per share) in the first quarter of fiscal 2019.

Digital Turbine ended the quarter with a cash balance of $16.2 million, compared to $10.9 million on March 31, 2019. The company continues to have zero debt.

For the second quarter, Digital Turbine expects revenue in the range of $31.0 to $32.0 million. At the midpoint, this would be year-over-year growth of 31.7%.

The company also expects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of between $3.2 and $3.7 million. At the midpoint, this would be a 115% gain over the second-quarter-2018 adjusted EBITDA of $1.6 million.

Analyst Take

Digital Turbine stock has been on the rise because advertisers love the company’s mobile advertising platform.

In its first quarter, Digital Turbine Inc exceeded internal expectations—with record revenue, gross profit, adjusted net income, and adjusted EBITDA.

The company also made significant operational progress with new partnerships and strategic platform initiatives. Digital Turbine has been seeing increased interest and spending from Fortune 100 companies, and it is in advanced discussions with numerous global operators.

APPS stock has made impressive gains in 2019, but by all accounts, more gains are still to come.