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Digital Turbine (APPS) to Post Q1 Earnings: What's in Store?

Zacks Equity Research

Digital Turbine APPS is set to release first-quarter fiscal 2020 results on Aug 5.

The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average positive surprise being 87.5%.

In the last reported quarter, earnings of 3 cents per share beat the Zacks Consensus Estimate by a penny. The company had reported loss of a cent in the year-ago quarter.

Revenues grew 29.7% year over year to $27.2 million and were better than the consensus mark.

For first-quarter fiscal 2020, Digital Turbine expects revenues between $28 million and $28.5 million. The Zacks Consensus Estimate for revenues is currently pegged at $28.4 million, indicating 28.4% growth from the figure reported in the year-ago quarter.

Moreover, the Zacks Consensus Estimate for earnings stands at 2 cents, unchanged over the past 30 days and suggests growth of 300% from the figure reported in the year-ago quarter.

Digital Turbine, Inc. Price and EPS Surprise


Digital Turbine, Inc. Price and EPS Surprise

Digital Turbine, Inc. price-eps-surprise | Digital Turbine, Inc. Quote

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

Digital Turbine’s mobile device management platform, Ignite, has been gaining significant traction. In fourth-quarter fiscal 2019, Ignite was installed in roughly 29 million devices. As of Jun 3, 2019, approximately 260 million devices had Ignite installed, which is a major driver for the company’s advertising revenues in the to-be-reported quarter.

Notably, in the fourth quarter, U.S. revenue-per-device (RPD) increased 27% year over year, reflecting strong demand for the Digital Turbine platform among advertisers. Moreover, improving global RPD indicates solid demand for the company’s ad solutions.

Additionally, strong contributions from products like SingleTap, Folders, App Wizard and Notifications are expected to drive the top line.

During the fiscal first quarter, Digital Turbine inked partnerships with AppsFlyer, Branch, Kochava and Singular to boost SingleTap’s capabilities. These are well-known attribution and analytics companies, covering roughly 85% of the global mobile applications market.

Notably, SingleTap streamlines the app installation process by enabling app delivery from any mobile ad in just one tap. The solution is enabled in more than 150 million Android devices and its click-to-install conversion rate is impressive. This has helped in increasing its demand among advertisers and application providers. Further, an expanding partner base, which includes Twitter, Pinterest, Pandora and others, must have enhanced penetration in the second quarter.

Additionally, an expanding International partner base that now includes Samsung is a key catalyst for Digital Turbine. The company is already live on Samsung’s S10 5G device on Verizon’s network.

Moreover, the addition of new markets in Europe and Latin America is expected to drive the top line despite sluggish growth and a saturating smartphone market.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a good chance of beating estimates. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Digital Turbine has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Stocks With Favorable Combination

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

CACI International CACI has an Earnings ESP of +4.02% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cisco Systems CSCO has an Earnings ESP of +1.53% and a Zacks Rank #2.

Vonage Holdings VG has an Earnings ESP of +14.29% and a Zacks Rank #3.

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