New Forecasts: Here's What Analysts Think The Future Holds For Digital Turbine, Inc. (NASDAQ:APPS)

By
Simply Wall St
Published
June 02, 2021
NasdaqCM:APPS
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Celebrations may be in order for Digital Turbine, Inc. (NASDAQ:APPS) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

After the upgrade, the four analysts covering Digital Turbine are now predicting revenues of US$1.1b in 2022. If met, this would reflect a sizeable 238% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 130% to US$1.43. Prior to this update, the analysts had been forecasting revenues of US$678m and earnings per share (EPS) of US$1.05 in 2022. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

See our latest analysis for Digital Turbine

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NasdaqCM:APPS Earnings and Revenue Growth June 3rd 2021

Despite these upgrades, the analysts have not made any major changes to their price target of US$108, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Digital Turbine at US$132 per share, while the most bearish prices it at US$86.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Digital Turbine's past performance and to peers in the same industry. The analysts are definitely expecting Digital Turbine's growth to accelerate, with the forecast 238% annualised growth to the end of 2022 ranking favourably alongside historical growth of 36% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 13% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Digital Turbine is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Digital Turbine.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Digital Turbine analysts - going out to 2023, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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