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Digital Turbine (APPS) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3 min read

Digital Turbine (APPS) closed the most recent trading day at $32.86, moving +0.18% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.48%. At the same time, the Dow added 0.2%, and the tech-heavy Nasdaq lost 0.01%.

Heading into today, shares of the mobile software company had lost 29.23% over the past month, lagging the Computer and Technology sector's loss of 11.75% and the S&P 500's loss of 8.48% in that time.

Investors will be hoping for strength from Digital Turbine as it approaches its next earnings release. In that report, analysts expect Digital Turbine to post earnings of $0.40 per share. This would mark year-over-year growth of 60%. Meanwhile, our latest consensus estimate is calling for revenue of $336.5 million, up 253.91% from the prior-year quarter.

Investors might also notice recent changes to analyst estimates for Digital Turbine. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Digital Turbine is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note Digital Turbine's current valuation metrics, including its Forward P/E ratio of 15.44. This valuation marks a discount compared to its industry's average Forward P/E of 52.94.

Also, we should mention that APPS has a PEG ratio of 0.31. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Software industry currently had an average PEG ratio of 3.06 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 180, which puts it in the bottom 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow APPS in the coming trading sessions, be sure to utilize Zacks.com.


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