Digital Turbine Inc: Mobile App Stock up 810% Since March, But Not Done Yet

Digital Turbine Inc: Lots of Room to Run

Digital Turbine Inc (NASDAQ:APPS) is a one-time penny stock I’ve been bullish on for a long time.

Digital Turbine Inc stock broke out to the upside in 2019, finishing the year up 273%. And 2020 looked like it was going to be even better. Despite the coronavirus pandemic-fueled sell-off in March, it has been.

At the time of this writing, APPS stock has climbed 328% year-over-year, has advanced 345% year-to-date, and has soared 810% since bottoming in March.

Digital Turbine’s growth in 2020 has been nothing short of meteoric, but, by all accounts, it’s not done yet. APPS stock is certainly poised for some short-term profit taking, but, thanks to strong financial results and an equally strong outlook, the company’s near- and long-term outlooks remain excellent.

Chart courtesy of StockCharts.com

APPS Stock Overview

The app world is a crowded place. In fact, there are 2.8 billion apps on “Google Play.”

Digital Turbine Inc’s mobile advertising platform makes it easier for apps to get discovered by consumers. APPS provides on-demand media and mobile communication solutions to mobile operations, developers, and original equipment manufacturers (OEMs) around the world. (Source: “Investor Relations,” Digital Turbine Inc, last accessed September 16, 2020.)

“Ignite,” is the company’s software platform that allows mobile operators and OEMs to control, manage, and monetize devices. So far, it has been installed on more than 450 million devices total. In the first quarter of fiscal 2020 alone, it was installed on 43 million new devices.

To date, Digital Turbine Inc’s technology has been adopted by more than 40 mobile operators and OEMS, which has resulted in more than three billion app preloads, for tens of thousands of advertising campaigns.

Record Net Income of $9.9 Million

For the first quarter of fiscal 2021, ended June 30, Digital Turbine Inc announced that revenue had climbed 93% year-over-year to $59.0 million. (Source: “Digital Turbine Reports Fiscal 2021 First Quarter Results,” Digital Turbine Inc, August 5, 2020.)

Net income for the first quarter of fiscal 2021 was $9.9 million, or $0.11 per share, versus a net loss of $1.7 million, or a loss of $0.02 per share, in the same period last year.

Adjusted net income was $12.5 million, or $0.13 per share, a 197% increase over adjusted net income of $4.2 million, or $0.05 per share, recorded in the same prior-year period.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was up 235% year-over-year at $14.1 million.

“Our fiscal first quarter was a breakout quarter for Digital Turbine,” said Bill Stone, CEO.  “Positive momentum trends throughout the business drove better-than-expected results and have the company well-positioned for continued strong performance going forward.”

Digital Turbine Inc’s Business Outlook

For the second quarter of fiscal 2021, Digital Turbine expects to report:

• Revenue of between $59.0 million and $61.0 million, representing year-over-year growth of 83%
• Adjusted EBITDA of between $11.0 million and $12.0 million, for year-over-year growth of 155%
• Adjusted earnings per share (EPS) of between $0.11 and $0.12, compared to adjusted EPS of $0.05 per share in the second quarter of fiscal 2020

Analyst Take

Digital Turbine Inc is rarely in the news. If anything, the only time you really hear anything from the company is when it announces its financial results. And that’s all investors have really needed to know to help send the company’s shares significantly higher in 2020.

By all accounts, APPS stock is poised to climb higher over the last three months of 2020, with management confirming that the company is “well-positioned for continued strong performance going forward.”