Digital Turbine Inc’s (NASDAQ:APPS) Shift From Loss To Profit
Digital Turbine Inc’s (NASDAQ:APPS): Digital Turbine, Inc., through its subsidiaries, provides media and mobile communication solutions for mobile operators, application developers, device original equipment manufacturers, and other third parties worldwide. On 31 March 2018, the US$118.02m market-cap posted a loss of -US$19.70m for its most recent financial year. Many investors are wondering the rate at which APPS will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for APPS.
See our latest analysis for Digital Turbine
Expectation from Software analysts is APPS is on the verge of breakeven. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$2.52m in 2020. So, APPS is predicted to breakeven approximately a few months from now. In order to meet this breakeven date, I calculated the rate at which APPS must grow year-on-year. It turns out an average annual growth rate of 134.44% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for APPS given that this is a high-level summary, though, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing I’d like to point out is that APPS has managed its capital prudently, with debt making up 19.22% of equity. This means that APPS has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on APPS, so if you are interested in understanding the company at a deeper level, take a look at APPS’s company page on Simply Wall St. I’ve also put together a list of pertinent factors you should further research:
Valuation: What is APPS worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether APPS is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Digital Turbine’s board and the CEO’s back ground.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
