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Craig-Hallum raised its price target on Digital Turbine (NASDAQ:APPS) to $7.00 from $4.00 on Tuesday, while maintaining a Buy rating on the mobile software company’s stock. The stock, currently trading at $6.81, has shown remarkable strength with a 184% gain year-to-date, according to InvestingPro data. This performance places it near its 52-week high of $6.86, significantly above its low of $1.18.
The investment firm cited Digital Turbine’s work with large SingleTap customers preparing for alternative app store launches as a key driver for the upgrade. The company currently has live partnerships with Telefonica (NYSE:TEF) in the UK, Germany, and Brazil with Epic Games, providing Digital Turbine both fee and royalty revenue.
Digital Turbine recently secured a four-month extension on its approximately $409 million debt, which is not due until April 2026. The extension helps the company avoid triggering a going concern assumption by keeping the obligation classified as long-term debt. InvestingPro analysis highlights that the company operates with a total debt of $414.94 million and a debt-to-equity ratio of 2.54, indicating a significant leverage position.
The company reported better-than-expected results for the March quarter, particularly in EBITDA performance, and provided fiscal year 2026 revenue guidance in line with Street expectations while projecting stronger EBITDA. Craig-Hallum suggested the guidance may be conservative as it was the first earnings call for new CFO Stephen Lasher.
Craig-Hallum also highlighted Digital Turbine’s strong advertising business, noting that brand advertisers are shifting spending toward the company, and identified current or potential partners including AppLovin (NASDAQ:APP), Epic Games, TikTok, Telefonica, and possibly Meta (NASDAQ:META) returning "with the recent alternative app store launches opening the door for advertising." While InvestingPro data shows the company faces near-term challenges with an expected 10% revenue decline this fiscal year, analysts project a return to profitability. Get access to 10+ additional ProTips and comprehensive financial analysis through InvestingPro’s detailed research reports.
In other recent news, Digital Turbine Inc. reported its financial results for the fourth quarter of fiscal year 2025, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $0.10, significantly exceeding the forecasted $0.04. Revenue for the quarter reached $119.2 million, surpassing the anticipated $116.21 million and marking a 6% year-over-year increase. Additionally, the company’s adjusted EBITDA grew by 66% year-over-year to $20.5 million. Despite a 10% decline in full-year revenue, Digital Turbine has shown resilience through strategic cost optimizations and innovations. The company is projecting revenue between $515 million and $525 million for FY2026, alongside adjusted EBITDA of $85 million to $95 million. Analysts from Craig Hallum noted the company’s improved international revenue per device growth strategies and the benefits of the shifting regulatory environment.
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