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Investing.com - BofA Securities upgraded Digital Turbine (NASDAQ:APPS) from Underperform to Neutral and raised its price target to $5.50 from $4.50 following the company’s return to growth. The stock, currently trading at $5.44, appears undervalued according to InvestingPro analysis, with shares showing remarkable momentum, gaining over 220% year-to-date.
Digital Turbine reported its second consecutive quarter of growth since the second quarter of 2023, delivering 11% year-over-year revenue growth, which exceeded BofA’s 5% projection. While the company is not currently profitable, analysts tracked by InvestingPro expect positive earnings in the coming fiscal year.
The company’s On-Device Solutions (ODS) segment grew 18% year-over-year, its highest quarterly growth in three years, with management highlighting improvements in both revenue per device (up over 30% year-over-year) and device volumes, including U.S. devices which had been a persistent challenge for the past three years.
Digital Turbine is investing in technology to better leverage first-party data and artificial intelligence/machine learning for user targeting, which has increased advertiser demand particularly for premium placements, resulting in improved pricing and fill rates in the first fiscal quarter.
The company’s Advertiser and Publisher Group (APG) declined 5% year-over-year but grew quarter-over-quarter, indicating sequential stabilization in that segment.
In other recent news, Digital Turbine Inc. reported its financial results for the first quarter of fiscal year 2026. The company posted earnings per share of $0.05, which did not meet the analysts’ forecast of $0.07, resulting in a 28.57% negative surprise. On a positive note, Digital Turbine’s revenue exceeded expectations, coming in at $130.9 million compared to the projected $121.64 million. This mixed performance highlights the company’s challenges in meeting earnings expectations while successfully surpassing revenue forecasts. These developments are crucial for investors as they assess Digital Turbine’s financial health and future prospects.
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