Digital Turbine Can Maintain Market Leading Position In The Foreseeable Future, This Bullish Analyst Says

Unlike the broker ad networks that broker ad inventory between thousands of publishers and mobile app marketers, Digital Turbine Inc (NASDAQ: APPS) operates in a niche space, with exclusive contracts to help more than 40 mobile carriers, while OEMs generate additional revenue from user engagement with the device and carrier homepages, according to BofA Securities.

The Digital Turbine Analyst: Omar Dessouky initiated coverage of Digital Turbine with a Buy rating and a price target of $24.

Meanwhile, Benzinga analyst ratings data finds a consensus Buy rating on the stock.

The Digital Turbine Thesis: The company has a dominant market share of 70% of U.S. Android active devices, which should keep barriers to entry intact for the foreseeable future, Dessouky said in the initiation note.

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“Over 60% of Android devices globally do not have Ignite (APPS) or Aura (IS) software installed, leaving room for APPS’ core business to expand organically,” the analyst wrote, while projecting a 25% On-Device revenue CAGR (compounded annual growth rate) through fiscal 2026, “driven by an 11% Ignite device installed base CAGR and 14% CAGR in avg. revenue per device.”

“We think that new carriers and OEMs would gravitate to either APPS or IS as we don’t foresee clear incentives to take the risk of onboarding an unestablished vendor for only an incremental revenue opportunity,” he added.

APPS Price Action: Shares of Digital Turbine were up 13.80% to $14.84 at the time of publication Monday.