Digital Turbine Inc: Shares Set to Triple in 2019, Strong Double-Digit Upside Over Coming Months

APPS Stock Scorching Broader Market

Digital Turbine Inc (NASDAQ:APPS) is the perfect example of what a well-run tech penny stock can do. Thanks to strong financial results and guidance, APPS stock has soared 192% since the start of 2019 and is up 36.5% since the start of June.

These numbers trounce what is happening on the S&P 500 and tech-heavy Nasdaq. The S&P 500 is up 20% year-to-date and 8.1% since the start of June. The Nasdaq, meanwhile, is up an impressive 25% year-to-date and 9.1% since the start of June. All good, but not as good as what’s going on at Digital Turbine.

Fiscal 2019 (ended March 31, 2019) was a breakout year for the mobile communication company, and it looks like that momentum is carrying over into fiscal 2020.

Currently trading at $5.20 per share, the 2019 year-to-date price of APPS stock is poised to triple in the coming weeks, and thanks to strong guidance, is set to ratchet up strong double-digit gains in the back half of 2019. APPS stock doubling again from current levels in 2020 is certainly not out of reach.

APPS Overview

Digital Turbine Inc’s products are designed to help consumers discover new apps, which helps provide brands connect with qualified users and generate new revenue streams. (Source: “About Digital Turbine,” Digital Turbine Inc, last accessed July 9, 2019.)

Its flagship advertising platform, “Ignite,” is a mobile platform that is preinstalled by carriers like Verizon Communications Inc. (NYSE:VZ) and T-Mobile Us Inc (NASDAQ:TMUS).

To date, the company’s technology has been adopted by more than 30 mobile operators and original equipment manufacturers worldwide, delivering 1.6 billion app preloads on over 160 million devices in 90 countries, for tens of thousands of advertising campaigns.

(Source: “Digital Turbine, Inc. (APPS),” Yahoo! Finance, last accessed July 9, 2019.)

APPS stock has been bullish throughout 2019. The company entered the year trading at $1.85 and hit a new 52-week high of $5.41 on July 3, for a year-to-date gain of 192%.

In May, while the broader markets were selling off on fears of a trade war with Mexico and a tech trade war with China, APPS stock remained flat. That might not sound that impressive, but May was the worst May for stocks since 2010, with the S&P 500 tumbling 6.7% and the Nasdaq down 8.3%.

Digital Turbine’s stock rebounded in June, and has since then advanced 36.5%.

Chart courtesy of StockCharts.com

Fourth-Quarter Revenue Up 30% In Breakout Year

Digital Turbine’s fourth-quarter revenue was up 30% year-over-year at $27.2 million. The company reported a fourth-quarter net loss of $6.8 million, or $0.09 per share, compared with a loss of $4.2 million, or $0.06 per share, in the same prior-year period. (Source: “Digital Turbine Reports Fourth Quarter and Fiscal Full Year 2019 Results,” Digital Turbine Inc, June 3, 2019.)

Fourth-quarter adjusted net income was $2.4 million, or $0.03 per share, a significant improvement over the adjusted net loss of $0.6 million, or $0.01 per share in the fourth quarter of last year.

Fourth-quarter adjusted earnings before interest, tax, amortization, and depreciation (EBITDA) was $3.3 million, compared to adjusted EBITDA of zero in the fourth quarter of last year.

Digital Turbine Inc ended fiscal 2019 with $10.9 million in cash and cash equivalents and zero total debt.

“We believe that by continuing to deliver attractive returns for our many platform constituents, we can expect to deliver attractive returns for our investors,” said company CEO Bill Stone.

For the first quarter of fiscal 2020, ended June 30, 2019, Digital Turbine Inc expects revenue to be in a range of between $28.0 million and $28.5 million for a year-over-year increase of approximately 28%. Adjusted first-quarter EBITDA is projected to be between $2.2 million and $2.6 million. In the first quarter of fiscal 2019, Digital Turbine reported adjusted EBITDA of $0.2 million.

Analyst Take

Digital Turbine Inc has been on fire because more and more digital operators and brands are taking advantage of the company’s advertising platform. And they’re doing that because it’s getting more and more difficult to attract the attention of consumers.

That environment isn’t going to disappear anytime soon. If anything, there will be even more demand for Digital Turbine’s products over the coming years.

APPS stock is set to at least triple in 2019 and 2020 looks just as bullish.