Is Digital Turbine a buy?

It’s time to talk about another unpopular technology name! Here is the breakdown on $APPS, otherwise known as Digital Turbine.

Current Price: $36.51

52/Wk High: $37.314

52/Wk Low: $3.48

Read below for the breakdown!

Digital Turbine is a relatively new company to the market. The company's core business is delivering solutions and products that assists mobile operators, applications advertisers, and much more within the mobile advertising space. 

According to the company’s business page;

“Digital Turbine simplifies content discovery and delivers relevant content directly to consumer devices.  The Company's on-demand media platform powers frictionless app and content discovery, user acquisition and engagement, operational efficiency and monetization opportunities,” (ir.digitalturbine.com).

As of the most recent quarter, Digital Turbines application media software had been installed on 43 million devices alone in the first fiscal quarter of 2021. 

Given Q1’s stellar growth, Digital Turbines application media software has now been downloaded on over 450 million devices.

Digging into Q1 of 2021, the most recent quarter, the numbers are not bad. Digital Turbine delivered a Q1 beat with an EPS of $0.13 versus the analysts consensus estimate of $0.09. Not only that, but revenue also continues to increase, and came in at $59.0 million, up 93.15% since Q1 of 2020.

Furthermore, Digital Turbine turned out solid income, with Net Income landing at a non-GAAP level of $12.5 million for the first quarter of 2021. 

Taking a look at the balance sheet the numbers could be better but are not terrible. As of Q1 2021, Digital Turbine sat on a Total Debt level of $19.708 million and a Total Liabilities level of $102.477 million.

On the brightside, management has managed to maintain a solid Cash and Short Term Investments level of $18.723 million. 

Digital Turbine management also offered solid Q2 guidance. Management expects Q2 2021 revenues of $59 million to $61 million with a non-GAAP EPS of $0.11 to $0.12. 

When it comes to the analysts the so called experts are quite bearish. Currently, the mean price target sits at $27.20/share, representing a -25.34% loss.

Furthermore the high price target sits at $40.00/share, representing a 9.80% gain, while the low price target is $23.00/share, representing a -36.87% loss. 

The big money on the other hand is relatively bullish. Currently, institutions hold 67.14% of $APPS. Top holders include Venrock, The Vanguard Group, and BlackRock Institutional Trust.

Based on the numbers below, Digital Turbine is relatively expensive.

Price to Earnings = 126.19x

Price to Sales = 18.76x

Price to Book = 35.13x

Price to Cash Flow = 68.04x

Market Cap = $3.2 billion 

The charts also represent a relatively expensive moment to jump in on Digital Turbine stock. According to the six-month charts, the MACD has gone relatively flat, with a range right around 2.72.

Furthermore, the six-month RSI sits at a high 70.37 and is nearing an overbought level. The six-month CCI also sits at a whopping 114.8 with the stock is sitting just under a point from its highs. 

Overall, Digital Turbine presents some solid opportunities in the long term but is simply too high to open a position at the moment. While I am bullish on the name, I recommend waiting for a pullback to jump in on Digital Turbine. 

EAT - SLEEP - PROFIT 💰

Disclaimer: This is not direct financial advice, simply opinion based on independent research.