Why Digital Turbine Stock Crashed 44% This Week

Shares of Digital Turbine (NASDAQ: APPS) crashed as much as 44% this week, according to data from S&P Global Market Intelligence. The mobile application and digital advertising company posted revenue declines for its most recent quarter, which caused investors to get bearish on the stock. As of 1:30 p.m. on Friday, shares of Digital Turbine are down 34.8% this week and 64% over the last 12 months.

Earlier this week, Digital Turbine updated investors on its financial results for the first three months of 2023. Revenue totaled $140 million in the period, a 24% decline year over year. A big slowdown in advertising spend across its platforms has hurt its earnings power, with the company flipping from a positive net income of $20.1 million last year to a net loss of $13.9 million this year. Even though investors were expecting poor results in the quarter, this report was likely much worse than they feared, which is why the stock collapsed this week.

It should also be noted that Digital Turbine is a small-cap company, with a market cap of just over $1 billion before these stock losses, and is not as heavily traded as a larger, well-known company like . Generally, this will make the stock much more volatile compared to a blue chip name, as only a small change in investor sentiment can drive the price way down. If you own shares of Digital Turbine, you should expect heavy volatility (both up and down) to continue in the future, no matter how well the business is doing.

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Source Fool.com