BofA analyst Omar Dessouky has increased Digital Turbine's (APPS, Financial) price target from $1.50 to $4.50, while maintaining an Underperform rating on the stock. This adjustment comes as Digital Turbine reports its first quarter of growth since the second quarter of fiscal year 2023, following a lengthy period of year-over-year declines over ten quarters. The analyst considers this growth a significant turning point, indicating a potential turnaround for the company.
Despite this optimism, the firm remains cautious, noting that Digital Turbine's valuation is not very appealing when compared to other companies in the adtech sector that exhibit stronger growth and competitive advantages but trade at similar valuations. Therefore, while there are signs of recovery, investors should weigh these factors when considering the stock's potential.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 2 analysts, the average target price for Digital Turbine Inc (APPS, Financial) is $2.75 with a high estimate of $4.00 and a low estimate of $1.50. The average target implies an downside of 42.83% from the current price of $4.81. More detailed estimate data can be found on the Digital Turbine Inc (APPS) Forecast page.
Based on the consensus recommendation from 2 brokerage firms, Digital Turbine Inc's (APPS, Financial) average brokerage recommendation is currently 3.0, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Digital Turbine Inc (APPS, Financial) in one year is $7.13, suggesting a upside of 48.23% from the current price of $4.81. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Digital Turbine Inc (APPS) Summary page.
APPS Key Business Developments
Release Date: June 16, 2025
- Revenue: $119.2 million for the fiscal fourth quarter, representing 6% growth year over year.
- EBITDA: $20.5 million for the fiscal fourth quarter, a 66% increase year over year.
- Non-GAAP Earnings Per Share: $0.10 for the fiscal fourth quarter.
- Free Cash Flow: $5.5 million in the fiscal fourth quarter, an increase of over $21 million compared to the prior year period.
- Non-GAAP Gross Margin: 48% in the fiscal fourth quarter, up from 46% in the previous year.
- Cash Operating Expenses: $36.1 million in the fiscal fourth quarter, a 7% decline year over year.
- GAAP Net Loss: $18.8 million or $0.18 per share for the fiscal fourth quarter.
- Non-GAAP Net Income: $10.1 million or $0.10 per share for the fiscal fourth quarter.
- Full Fiscal Year 2025 Revenue: $490.5 million, a 10% decline from the previous year.
- Full Fiscal Year 2025 EBITDA: $72.3 million, compared to $92.4 million in the previous year.
- Cash Balance: $40.1 million at the end of the fiscal fourth quarter.
- Debt Balance: $408.7 million at the end of the fiscal fourth quarter.
- Fiscal Year 2026 Revenue Outlook: Expected to be between $515 million and $525 million.
- Fiscal Year 2026 Adjusted EBITDA Outlook: Projected to be between $85 million and $95 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Digital Turbine Inc (APPS, Financial) returned to year-over-year growth in both revenue and EBITDA, with EBITDA growing by 66%.
- The company extended its credit facility, which is expected to lower the cost of capital in the future.
- Revenue per device (RPD) increased significantly, with a 40% rise in the US and over 100% internationally, driven by strong advertiser demand.
- The company has made significant strides in leveraging first-party data and AI machine learning, leading to improved conversion rates.
- Digital Turbine Inc (APPS) has expanded its device footprint and product portfolio, including the launch of a new version of Ignite on over 100 million devices.
Negative Points
- The AGP segment experienced a 3% year-over-year decline in revenue.
- The company reported a GAAP net loss of $18.8 million for the fiscal fourth quarter.
- Total revenue for the full fiscal year 2025 declined by approximately 10% compared to the previous year.
- The company has a significant debt balance of $408.7 million at the end of the quarter.
- Despite improvements, the company still faces challenges in optimizing expenses and achieving further efficiencies.
