What Happened to the Digital Turbine Stock Price?
- Shares of on-demand mobile media platform provider Digital Turbine (NASDAQ:APPS) popped after the company provided a bullish business update which includes above-consensus revenue numbers for both the current quarter and next quarter.
- APPS stock has been one of the market’s biggest winners over the past year, as its on-demand mobile media platform has gained significant traction among mobile phone operators and app developers. During that stretch, APPS stock has increased by more than 10X.
Why It Happened
- In the same press release that Digital Turbine announced the closure of its AdColony acquisition, management provided preliminary fourth quarter 2021 and first quarter 2022 numbers.
- Those numbers were very good.
- Management expects fourth quarter revenue to clock in around $95.1 million, which is roughly 15% better than the $83 million expected by Wall Street analysts.
- Management also expects first quarter revenue to be $137.5 million, which is a whopping 60% better than the $86 million expected by Wall Street analysts.
- This new guide implies 142% revenue growth in Q4 and 133% revenue growth in Q1, following 146% revenue growth in Q3.
- In other words, the growth narrative here refuses to slow.
- So does APPS stock. It just keeps powering higher.
Does It Matter?
- We believe Digital Turbine is a long-term winner.
- The company’s core business of pre-installing apps onto phones and dynamically installing apps onto phones based on usage data is a genius one that represents the future of mobile app marketing and advertising.
- Management is also doing everything it can to innovatively expand its mobile media solutions ecosystem via acquisitions.
- As a result, Digital Turbine’s growth narrative refuses to slowdown.
- So long as this growth narrative remains robust, APPS stock will continue to power higher at an incredible pace.
APPS Stock Price Forecast
- Digital Turbine stock is richly valued. No doubt about it. APPS stock trades at 17X forward sales.
- But this premium multiple is justified by the company’s growth rates and potential. Revenues are more than doubling every quarter, and less than 20% of smartphones in the world use Digital Turbine’s software — when, in reality, all 100% of them could theoretically benefit from using it.
- As such, we think APPS stock has solid upside from here.
- The consensus Wall Street price target on APPS stock is $97.
- We think shares will run towards and above $100 within the next few months.
APPS stock is a great long-term holding. But it is just one stock of many which we feel represents a new wave of technology disruptors positioned to massively change the way the world plays, eats, travels, and works over the next decade.
The world’s entertainment services are being digitized at a pace that’s accelerating, as globalization and technological convenience converge to create a more tech-centric society.
My top hypergrowth stocks in this megatrend include companies from social media, advertising, streaming and iGaming.
Each of these stocks has the potential to soar 10X and beyond…
Get my complete list of stocks to buy in Digitainment by subscribing to Innovation Investor today.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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