News Flash: 7 Analysts Think Digital Turbine, Inc. (NASDAQ:APPS) Earnings Are Under Threat
The analysts covering Digital Turbine, Inc. (NASDAQ:APPS) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the latest downgrade, Digital Turbine's seven analysts currently expect revenues in 2024 to be US$698m, approximately in line with the last 12 months. Statutory earnings per share are presumed to soar 26% to US$0.65. Before this latest update, the analysts had been forecasting revenues of US$799m and earnings per share (EPS) of US$0.96 in 2024. Indeed, we can see that the analysts are a lot more bearish about Digital Turbine's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
View our latest analysis for Digital Turbine
It'll come as no surprise then, to learn that the analysts have cut their price target 17% to US$17.65. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Digital Turbine analyst has a price target of US$25.00 per share, while the most pessimistic values it at US$12.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 1.3% by the end of 2024. This indicates a significant reduction from annual growth of 52% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 12% per year. It's pretty clear that Digital Turbine's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.
Unfortunately, the earnings downgrade - if accurate - may also place pressure on Digital Turbine's mountain of debt, which could lead to some belt tightening for shareholders. You can learn more about our debt analysis for free on our platform here.
We also provide an overview of the Digital Turbine Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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