APPS stock was trading at $14.98 as of 12:41 PM EDT.
On Monday, shares of Digital Turbine (NASDAQ:APPS) went up by about 5% after Bank of America started to cover the company and said that it is “undervalued” right now. Analyst Omar Dessouky started covering Digital Turbine (APPS) with a buy rating and a $24 price target. He said that the company has exclusive contracts with more than 40 mobile carriers and original equipment manufacturers to help them make more money by monetizing time spent on device and carrier homepages.
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Dessouky wrote that the current implied [2024 enterprise value-to-EBITDA] ratio of 7x “appears low to us for a business that is still expected to grow at 20% a year.” He also said that Digital Turbine’s (APPS) on-device solutions are undervalued at an enterprise value of $3 per active device when compared to Meta Platforms (NASDAQ:META) and Snap (NYSE:SNAP).
Forecast on APPS stock
Digital Turbine (NASDAQ:APPS), which focuses on a specific market, has more than 70% of Android devices in the United States, which Dessouky said: “should support barriers to entry for the foreseeable future.”
The analyst also said that rival products like IronSource’s (IS) Aura product, which is in second place and only generates 10% of sales, lag behind Digital Turbine’s (APPS) Array product by between 30% and 40%.
According to Dessouky, “We expect a 25% on-device revenue [compound annual growth rate] through (the calendar year 2025), driven by an 11% [compound annual growth rate] Ignite device installed base and a 14% [compound annual growth rate] in [average] revenue per device.
We think that new carriers and OEMs would prefer either Digital Turbine or ironSource since we don’t see any compelling reasons to work with a new vendor for a small increase in income.
Digital Turbine (APPS) announced earlier this month that it was making a strategic investment in Aptoide, which has more than 250 million users and is one of the largest independent Android app stores.
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Author Jowi Kwasu