On Wednesday, Digital Turbine (NASDAQ:APPS) experienced a revision in its stock outlook as Roth/MKM maintained a Neutral rating but reduced the price target to $2.50 from the previous $3.00.
The adjustment follows a review of the company's mixed financial outcomes, highlighting weak U.S. device sales as a significant obstacle.
The firm's analyst pointed out that while Digital Turbine's fiscal year 2025 guidance aligns with expected revenues, the forecast for adjusted EBITDA is approximately 3% lower.
However, there is an anticipation of growth resuming in the second half of the fiscal year 2025. The analyst recognized positive trends in gaming and brand spending, which could be seen as encouraging signs for the company.
Despite the introduction of new device partnerships and products like OneStore, the firm expressed a need for clearer visibility and improved profitability before a more optimistic outlook could be justified. The stance remains cautious until there is evidence of a sustainable return to growth for Digital Turbine.
The report reflects the firm's current stance on Digital Turbine, taking into account the latest financial data and market conditions.
The new price target of $2.50 represents a more conservative valuation of the company's stock, considering the challenges and potential outlined by the analyst.
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