Nasdaq-Listed Companies

Analysts Just Shipped A Captivating Upgrade To Their Digital Turbine, Inc. (NASDAQ:APPS) Estimates

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. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance. The market may be pricing in some blue sky too, with the share price gaining 26% to US$77.19 in the last 7 days. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

Following the upgrade, the current consensus from Digital Turbine's seven analysts is for revenues of US$392m in 2022 which - if met - would reflect a major 52% increase on its sales over the past 12 months. Per-share earnings are expected to soar 92% to US$0.85. Before this latest update, the analysts had been forecasting revenues of US$350m and earnings per share (EPS) of US$0.72 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

earnings-and-revenue-growthNasdaqCM:APPS Earnings and Revenue Growth February 5th 2021

It will come as no surprise to learn that the analysts have increased their price target for Digital Turbine 43% to US$79.29 on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Digital Turbine at US$77.00 per share, while the most bearish prices it at US$31.50. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Digital Turbine's growth to accelerate, with the forecast 52% growth ranking favourably alongside historical growth of 30% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% next 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 biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for next year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Digital Turbine could be worth investigating further.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Digital Turbine going out to 2025, 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.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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