Based in Texas digital turbine (NASDAQ:APPLICATIONS) can be simplistically described as an on-demand mobile media platform provider. Lately, investors have turned against a number of tech-focused companies. assets, and the APPS stock lost much of its value.
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However, just because the stock price is down doesn’t mean the company is in trouble. In fact, there is evidence that Digital Turbine is in expansion mode.
As InvestorPlace donor a mobile app marketing platform called Appreciate; and Fyber, a company that develops ad monetization solutions for mobile publishers.
Obviously, Digital Turbine is getting bigger, but is it getting better? There is at least one prominent Wall Street analyst who apparently sees value in Digital Turbine, so there may be a promising investment opportunity here.
A closer look at APPS Stock
Over the past year, APPS stock has wobbled all over the place and made it difficult to apply technical analysis. One thing we can say for sure is that the stock has a 52-week range of $35.55-$93.98.
That’s a wide range, so expect some volatility if you’re considering investing in Digital Turbine. It is wise to keep your position size small at all times.
Another indicator of volatility is the five-year monthly beta of APPS stock, which is 2.27. This means that the stock has historically tended to move, in both directions, at least twice as fast as the broader stock market.
Still, if you can tolerate being whipped, an investment in Digital Turbine could be a great contrarian bet. After all, the stock is much closer to its 52-week low than its 52-week high, as it opened at $37.42 on March 9.
The growth is undeniable
According to Digital Turbine, the global mobile advertising market is
whose value is expected to increase from $340 billion in 2021 to over $540 billion in 2025. Of course, the company is looking to capture a significant share of this booming market.
Is Digital Turbine successful in this endeavor? Admittedly, the selling pressure on APPS stocks could be off-putting to some traders. Still, I invite you to look under the hood and see how the company is doing financially.
As they say, the data doesn’t lie. In the third fiscal quarter of 2021, Digital Turbine generated $375.5 million in revenue, which is a staggering 324% year-over-year increase based on the reports.
Not only that, but the company reported non-GAAP adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $57 million, up 153% year over year.
These triple-digit gains provide a powerful rebuttal to any skeptics who thought digital advertising would be a dead market as our relationship with Covid-19 changes.
A highly differentiated ecosystem
Despite Digital Turbine’s success in meeting the demands of the mobile advertising market, there will always be skeptics as APPS stock has yet to make a significant comeback.
At least one person on Wall Street, however, is apparently beating the table in favor of Digital Turbine. In particular, Oppenheimer’s chief investment strategist John Stoltzfus pointed to Digital Turbine as a potential value play.
For starters, Stoltzfus acknowledged the “current difficult investor sentiment for growth stocks” as well as the “undeniably dynamic environment for adtech.”
Fair enough, but Oppenheimer’s analyst then came up with a powerful bullish argument with startling stats. “APPS remains one of our top picks for 2022 at 3.0x FY23E FV/revenue and 16.5x EBITDA vs 30-40% CAGR,” he said.
What will drive the continued success of Digital Turbine, then? Stoltzfus had a compelling answer to this question, explaining, “Potential growth should be underpinned by a highly differentiated, independent, end-to-end ad/media technology ecosystem, directly integrated into more than 1.5 billion devices by Handset OEMs and operator partners.
The basics of APPS Stock
Don’t get me wrong – you’re not supposed to buy APPS stock just because Stoltzfus likes it.
Rather, the idea is to consider the information it presents and come to your own conclusions. Then feel free to buy some Digital Turbine stock if you see strong value here, as Stoltzfus seems.
In the final analysis, there’s no denying the data that reveals Digital Turbine’s revenue growth. Knowing this, investors can start a small position in APPS shares in anticipation of a rebound sooner or later.
As of the date of publication, David Moadel had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.
