Advertising agency and software development company Digital Turbine (NASDAQ:APPS) took it on the chin in Thursday morning trading, losing over 5% at one point. It opened the day down 4%, and things only got worse. A downgrade from Bank of America Securities led the charge, but was there more going on? Bank of America analysts laid into Digital Turbine, noting that there were no visible catalysts lined up to help drive future growth as 2024 approaches.
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That lack of catalyst was enough for Bank of America to cut its outlook from Buy to “neutral” and also cut its price target from $12 per share to just $8. It didn’t help matters that, a month prior, Digital Turbine showed off earnings figures that not only revealed a 22% drop in revenue but also earnings per share that weren’t even half of what they were at the same time in 2022.
Yet, even as the environment pummels Digital Turbine, it’s working to improve its fortunes. Its partnership with Google Cloud and SADA, the cloud services company, recently expanded to allow Digital Turbine to pick up the pace of innovation. Just days ago, Deuterium Capital Management added an extra $187,000 to Digital Turbine’s coffers by buying 15,100 shares. Those aren’t signs of a company in open decline but rather of a company working to advance but being stunted by a market that’s offering limited opportunities in general right now. This is possible, but it’s not going to help Digital Turbine’s share price much in the near term.
There’s one other substantial problem facing Digital Turbine: its own insiders. Insider trading at Digital Turbine shows that insiders sold $370,700 of stock in the last three months. That was enough to push TipRanks’ insider confidence signal to “Negative.”
