Digital Turbine, Inc. (APPS)

Aside from some energy areas, everything is tanking - all currencies against the dollar, tech, high growth, UK stocks, Europe, US.

From a watchlist of 120 items across multiple sectors and territories only 13 have returned a positive share price result in the last 12 months and that reduces to just 6 if you want anything above a 10 percent return. Names such as Enphase, Serica (UK), Vaalco, Afentra (UK) and Kistos (UK).

36 of the companies on that list have lost more than 70 percent in value in the last 12 months, including such names as Shopify, Roku, Unity, Zoom, and Applovin.

I found $APPS 21st in this list, so 20 names have performed worse over the last 12 months, losing around 80 percent or more each.

But it interesting to look at this group - many have seen sales collapse, or already ran on thin or negative earnings, and had or now have various red flags.

$APPS, despite the share price slide, like just a few others still retain strong present and most-recent quarter numbers for things like Revenue, earnings, and FCF. In fact, aside from taking on a debt that is now reported as 36 percent of MCap (due to the share price slide), $APPS, at the most recent quarter, can still boast YoY increases for shareholder equity, Revenue, EPS, Op profit, gross profit, net profit, free cashflow, and EBIDTA - all of these items are up in absolute numbers vs the Q1 of last year, yet we were then trading 5x to 6x above this price at $75 to $85.

And when you apply a forecast of just 2 ratios against the entire list of more than 120 items - so, just supposing I want only stocks that are still forecast to have an EPS change over 100 percent, and companies that today still report a more than 20 percent return on capital, $APPS is the ONLY company that meets that criteria from my watchlist. In fact, only 22 companies across the whole of the US main indexes meet that criteria, and $APPS has seen both the biggest selloff of those 22 in the last year but also returned the highest annualised change over the last 5 years.

So, how to interpret this. The biggest red flags against $APPS right now are size of debt, sales growth and profit margin contraction. In absolute terms they are still performing very well but the pace of growth and margins slowed, likely due to acquisition digestion that brought them a much bigger TAM. In the latest quarter margins began to expand again and though revenue was not as strong as some hoped, the company confirmed they took a small hit on sales to instead focus more resource to margins. At the end of the day, profit is what ultimately matters and will allow the company to become debt free again, and then throw off surplus FCF which it can use for buybacks, dividends, growth etc.

The numbers suggest to me that the selloff in $APPS is partly justified, but way overdone, and that the company should continue to focus on debt repayment (stronger balance sheet) and profit margins rather than unprofitable sales growth. I hope next quarter reveals another uptick in margins, and a further reduction in gross debt, but in this market I don't expect miracles for the share price, just as so many other investors are finding across the board.

Anyone have a guess why DT wanted to extend secrecy with SEC?

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION September 21, 2022
ORDER GRANTING CONFIDENTIAL TREATMENT UNDER THE SECURITIES EXCHANGE ACT OF 1934
Digital Turbine, Inc.
File No. 001-35958 - CF#37163
Digital Turbine, Inc. submitted an application under Rule 24b-2 requesting an extension of a previous grant of confidential treatment for information it excluded from the Exhibits to a Form 10-Q filed on February 5, 2019.
Based on representations by Digital Turbine, Inc. that this information qualifies as confidential commercial or financial information under the Freedom of Information Act, 5 U.S.C. 552(b)(4), the Division of Corporation Finance has determined not to publicly disclose it. Accordingly, excluded information from the following exhibit(s) will not be released to the public for the time period(s) specified:
Exhibit 10.25.2 through January 13, 2025
For the Commission, by the Division of Corporation Finance, pursuant to delegated authority:
Dana Hartz
Chief, Knowledge Management Office

Let's see how long this post holds up:

If I was a Republican this year running for office, I would run on 3 things in this order, and you would easily be elected.

(1) Clean up crime in this country.
(2) Inflation.
(3) Secure the boarder.

😏

As we enter the fourth quarter of the year, retail businesses are going to need to advertise if they hope to come anywhere near making it for the year.
I believe I have seen where single tap increases digital ad revenues up to 60%. If this is true and my company was fighting for an increase share of the pie in quarter four, I would seriously look at single tap.
If I’m correct, Stone forecasted 5 new tier 1 single tap customers for Q322 and a total of 10 by the end of the year. If this happens, Q422 could be a decent quarter.
Hopefully FCF will be between $35 and $40 Million this and the next quarter, profit margins expand and DT gets those 10 single tap customers by the end of the year.