Digital Turbine Inc: Shares Set to Triple in 2019, Strong Double-Digit Upside Over Coming Months

Digital Turbine Inc Shares Up 192% in 2019, But Just Getting Started
iStock.com/SasinParaksa

APPS Stock Scorching Broader Market

Digital Turbine Inc (NASDAQ:APPS) is the perfect example of what a well-run tech penny stock can do. Thanks to strong financial results and guidance, APPS stock has soared 192% since the start of 2019 and is up 36.5% since the start of June.

These numbers trounce what has been happening on the S&P 500 and the tech-heavy Nasdaq. The S&P 500 is up 20% year-to-date and up 8.1% since the start of June. The Nasdaq, meanwhile, is up an impressive 25% year-to-date and up 9.1% since the start of June. All good, but not as good as what’s going on at Digital Turbine.

Fiscal 2019 (ended March 31, 2019) was a breakout year for the mobile communications company, and it looks like that momentum is carrying over into fiscal 2020.

Currently trading at $5.20 per share, APPS stock is poised to triple in 2019. Thanks to strong guidance, it’s set to ratchet up strong double-digit gains in the second half of the year. APPS stock doubling again from its current levels in 2020 is certainly not out of reach.

Advertisement

Digital Turbine Inc Overview

Digital Turbine Inc’s products are designed to help consumers discover new apps, which helps companies connect with qualified users and generate new revenue streams. (Source: “The ‘what and why’,” Digital Turbine Inc, last accessed July 9, 2019.)

Its flagship advertising platform, “Ignite,” is a mobile platform that is pre-installed by carriers like Verizon Communications Inc. (NYSE:VZ) and T-Mobile Us Inc (NASDAQ:TMUS).

To date, the company’s technology has been adopted by more than 30 mobile operators and original equipment manufacturers worldwide, delivering 1.6 billion app preloads on over 160 million devices in 90 countries, for tens of thousands of advertising campaigns.

APPS Stock Information

Market Cap $425.6 Million
52-Week Change 236.1%
52-Week High $5.41
52-Week Low $1.12
Shares Outstanding: $77.7 Million
Float 55.4 Million
50-Day Moving Average: $4.49
200-Day Moving Average: $3.39

(Source: “Digital Turbine, Inc. (APPS),” Yahoo! Finance, last accessed July 9, 2019.)

APPS stock has been bullish throughout 2019. The company entered the year trading at $1.85 and hit a new 52-week high of $5.41 on July 3, for a year-to-date gain of 192%.

In May, while the broader markets were selling off on fears of a trade war with Mexico and a tech trade war with China, APPS stock remained flat. That might not sound that impressive, but May 2019 was the worst May for stocks since 2010, with the S&P 500 tumbling 6.7% and the Nasdaq tumbling 8.3%.

Digital Turbine stock rebounded in June and has advanced 36.5% since then.


Chart courtesy of StockCharts.com

Fourth-Quarter Revenue Up 30% In Breakout Year

Digital Turbine’s fourth-quarter revenue was up 30% year-over-year, at $27.2 million. The company reported a fourth-quarter net loss of $6.8 million, or $0.09 per share, compared with a loss of $4.2 million, or $0.06 per share, in the same prior-year period. (Source: “Digital Turbine Reports Fourth Quarter and Fiscal Full Year 2019 Results,” Digital Turbine Inc, June 3, 2019.)

Fourth-quarter adjusted net income was $2.4 million, or $0.03 per share, a significant improvement from the adjusted net loss of $0.6 million, or $0.01 per share, in the fourth quarter of the previous year.

Fourth-quarter adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) was $3.3 million, compared to adjusted EBITDA of zero in the fourth quarter of last year.

Digital Turbine Inc ended fiscal 2019 with $10.9 million in cash and cash equivalents, and zero total debt.

“We believe that by continuing to deliver attractive returns for our many platform constituents, we can expect to deliver attractive returns for our investors,” said CEO Bill Stone.

For the first quarter of fiscal 2020, ended June 30, 2019, Digital Turbine Inc expects its revenue to be in the range of $28.0 to $28.5 million, for a year-over-year increase of approximately 28%. Adjusted first-quarter EBITDA is projected to be between $2.2 and $2.6 million. In the first quarter of fiscal 2019, Digital Turbine reported adjusted EBITDA of $200,000.

Analyst Take

Digital Turbine Inc has been on fire because more and more digital operators and other companies have been taking advantage of its advertising platform. And they’re doing that because it’s getting more difficult to attract the attention of consumers.

That environment isn’t going to disappear anytime soon. If anything, there will be even more demand for Digital Turbine’s products over the coming years.

With that, APPS stock is set to at least triple in 2019, and 2020 looks just as bullish.