Digital Turbine, Inc. (NASDAQ:APPS), which is in the software business, and is based in United States, received a lot of attention from a substantial price movement on the NASDAQCM over the last few months, increasing to US$8.88 at one point, and dropping to the lows of US$6.00. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Digital Turbine's current trading price of US$6.00 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Digital Turbine’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What is Digital Turbine worth?
Good news, investors! Digital Turbine is still a bargain right now. According to my valuation, the intrinsic value for the stock is $10.83, but it is currently trading at US$6.00 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Digital Turbine’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What does the future of Digital Turbine look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With revenues expected to grow by 90% over the next couple of years, the future seems bright for Digital Turbine. If the level of expenses is able to be maintained, it looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? Since APPS is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on APPS for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy APPS. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Digital Turbine. You can find everything you need to know about Digital Turbine in the latest infographic research report. If you are no longer interested in Digital Turbine, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.