Digital Turbine Inc.: Up 292% in 2019 Ahead of Q3 Earnings Release

Digital Turbine Inc.: Up 292% in 2019

Digital Turbine Inc Up 292% & Still Has Lots of Room to Run

Digital Turbine Inc (NASDAQ:APPS) continues to be one of the most rewarding tech stocks of 2019. APPS stock is up 292% year-to-date and, despite the strong triple-digit gains, it continues to have lots of room to run.

What’s behind Digital Turbine stock’s breakout year? Strong financial results and an equally strong balance sheet.

APPS Stock Overview

Digital Turbine’s insanely popular mobile technology helps apps get discovered. This helps companies generate new revenue streams and helps advertisers reach a wider, targeted audience. (Source: “Canaccord Genuity 39th Annual Growth Conference August 2019,” Digital Turbine Inc, last accessed October 25, 2019.)

The company has more than 40 long-term clients, including Verizon (NYSE:VZ), AT&T (NYSE:T), and Samsung Electronics Co Ltd (KRX:005930).

“Ignite,” the company’s geo-targeted mobile advertising platform, comes preinstalled on mobile phones.

Digital Turbine has helped its customers deliver 2.3 billion app preloads on 300 million devices, in 190 countries, for tens of thousands of advertising campaigns.

That 300-million-devices number may sound massive, but that’s just 10% of the company’s addressable global “Android” smartphone market.

APPS Stock Information

Market Cap $616.9 Million
52-Week Change 462.5%
52-Week High $7.84
52-Week Low $1.23
Shares Outstanding 83.0 Million
Float 62.9 Million
50-Day Moving Average $6.65
200-Day Moving Average $5.34

(Source: “Digital Turbine, Inc. (APPS),” Yahoo! Finance, last accessed October 17, 2019.)

First-Quarter Revenue Increased 38%, Net Income of $4.2 Million

In August, Digital Turbine announced that its revenue for the first quarter of 2020, ended June 30, 2019, increased 38% year-over-year to $30.6 million. (Source: “Digital Turbine Reports Fiscal 2020 First Quarter Results,” Digital Turbine, Inc., August 5, 2019.)

The company reported a net loss of $1.7 million, or $0.02 per share, compared to net income for the first quarter of fiscal 2019 of $1.5 million, also $0.02 per share.

Digital Turbine Inc reported adjusted first-quarter net income of $4.2 million, or $0.05 per share, compared to an adjusted net loss of $0.6 million, or $0.01 per share, during the first quarter of fiscal 2019.

Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) in the first quarter of fiscal 2020 was $4.2 million, compared to $200,000 in the first quarter of fiscal 2019.

Digital Turbine ended the quarter with a cash balance of $16.2 million and no debt.

The company will be announcing its results for the second quarter of fiscal 2020 after the markets close on November 4.

Digital Turbine expects to report revenue in the range of $31.0 to $32.0 million, representing year-over-year growth of about 32%.

It also expects to report adjusted EBITDA of between $3.2 and $3.7 million. At the midpoint, that would be a 115% gain over the second-quarter 2018 adjusted EBITDA of $1.6 million.

Analyst Take

Digital Turbine stock has been on a tear since the start of 2017, rising 932%. Furthermore, it’s up 432% year-over-year and up 292% year-to-date.

These kinds of huge gains would normally suggest that a pullback is in order, but APPS stock is really just getting started.

Digital Turbine Inc reported strong first-quarter results that exceeded the company’s guidance, with record revenue, gross profit, adjusted net income, and adjusted EBITDA.

Digital Turbine has been making significant operational progress with new partners and platform initiatives, and has been seeing increased interest from Fortune 100 companies.

All of which could propel APPS shares higher.