Markets

This Is Why Digital Turbine (APPS) Is Trading Near All Time Highs

Published

3 years ago

March 4, 2021

Austin Daniels

Quick Take

Digital Turbine Reported Record Results on their most recent earnings report
There stock price made new all time highs recently as it traded slightly over $100
Emerging Tech Stocks begin to scale back following recent “bubble like” comments from a Top Hedge Fund Founder

[mstock id=”2066″]

Digital Turbine [NASDAQ: APPS] is a computer software company that develops software for mobile devices. They are part of the Computer Software Industry Group which has been one of the leaders since the pandemic started. Shares of APPS are trading around 2000% higher since the pandemic started.

Most recently, the founder of Bridgewater Associates, Ray Dalio expressed his concerns for a bubble in the emerging tech industry.

APPS trades around 160 times the P/E of the S&P 500 but as it may seem overpriced to many, the company has put in a stellar earnings report with their CEO, Bill Stone stating on the companies earnings call:

“To close out our fiscal 2021 third quarter, we continue to build out on our breakout momentum from the first half of the fiscal year with record results across the board.”

Earning Results

Earnings Per Share (EPS) increased 320% year over year
Revenue increased 146% year over year
Number of funds increased from 338 to 394
Annual EPS increased from 0.8 in 2019 to 0.20 in 2020. (APPS has been seeing increased annual EPS numbers since 2015 and is projected to grow around 240% potentially in 2021

Gross Margins and EBITDA

With Gross Margins increasing to 43% from 40% the prior year they were able to increase there EBITDA 4x the EBITDA from the prior year. Bill Stone stated that having higher gross margins enabled them to, “turn the strong revenue growth into more than four times the EBITDA compared to the EBITDA generated a year ago 278% growth in non-GAAP earnings per share and more than 3x the free cash flow from a year ago as we continue to benefit from network effects of our platform and economies of scale.”

Outlook on Gross Margins

The CFO, Barrett Garrison stated on the companies earnings call:

“While gross margin rates can fluctuate from quarter-to-quarter, we anticipate further margin expansion as we continue to execute on our product and partner diversification strategy. We experienced continued impressive expense scale on the platform as cash expenses were $15.9 million in the quarter or 18% of revenue down from 25% of revenues in the prior year, and increased only 20% year-on-year on a pro forma basis, while revenues were up 73% in the period.”

International Business Growth

As the demand was strong in the United States for media products the growth was 25% but in the International media demand saw a increase of 190% with RPD growth of 70%.

International growth was something the company has expressed optimism about in the past.

“Combined with the strong device growth, our international supply revenues increased by nearly 200% year-over-year and for the first time, we also had more international demand revenues in our App Media business come from outside the United States.” CEO, Bill Stone stated on the companies conference call.

Adding to there successes, the have managed to add around 65 million devices in the quarter which represented a increase of 50% growth year over year.

Content Business

“In our content business, revenues in the December quarter pro forma increased by over 100% year-over-year. This result was driven by our new content platform being fully deployed and our legacy platform being sunset and improved advertising rates all driving better operating results.” Bill Stone, CEO

Guidance/Outlook from the CEO

“In particular, I’m pleased to announce that we anticipate multiple Tier-one partners to launch some of our content products later this year, which should materially improve our DAU counts and drive revenue synergies from our Mobile Posse acquisition last year.

Given the flattish US device trends at the moment, the overwhelming majority of growth in devices is occurring internationally as we are ramping our international partners.

We continue to make progress on our TV offerings as we discussed on our last earnings calls and look forward to those launches occurring later this year

While the strong growth is exciting, I believe it will be even better as we drive more revenue synergies on our content products.

Our recurring revenues are now nearly 50% compared to just over 10% a year ago. I also want to specifically call out our progress on SingleTap. Not including our social media integration with our large carrier partner, a few quarters ago we talked about SingleTap being on a seven-figure run rate. Last quarter we talked about it being on a seven-figure quarterly business for us. And today, I’m happy to say it’s now a seven-figure monthly business. The growth is becoming more material and we expect SingleTap to be a growth driver for the business in 2021 and beyond.”

Final Take On Earnings

The company has saw expanded growth and “Record Results”. There free cash flow totaled around 22 million which was a increase from 15 million the prior year. They now have $4.7 Million in cash on their balance sheet.

Following free cash flow, the CFO had this to say,

“I continue to be very pleased with the profitability and free cash flow delivered by our business. In the quarter, we achieved adjusted net income of $20 million or $0.21 per share during the quarter as compared to a $5 million or $0.05 per share in the third quarter of last year. Adjusted EBITDA of $22.5 million in the quarter was up 303% over prior year and margins continue to expand to 25.5% this quarter from 15.5% in the prior year quarter.”

The company expressed a desire to maintain strong free cash flow so they can have a greater flexibility and liquidity to take “advantage of potential opportunities to further accelerate our growth plans.”

Outlook/Guidance from the CFO

“Now, let me turn to our outlook. We currently expect full year fiscal 2021 revenue to grow to between $298 million and $300 million, and expect adjusted EBITDA to grow to between $71 million and $72 million, and adjusted net income per diluted share of $0.67. I’ll highlight that this implied growth in the midpoint of our guidance has our fiscal 2021 revenues growing over 115% year-over-year and EBITDA growing over 260%.” CFO, Barrett Garrison

Technical Analysis

APPS has been trading in a tight ranged ascending channel since July of 2020 on the weekly chart. Most recently it has touched over $100 making new all time highs but rejected off the top of the channel resistance.

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Markets

The Most Shorted Stocks as of Late March 2024

Published

4 weeks ago

April 24, 2024

Sir Chartist

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Short selling is a strategy used by investors who believe that a stock’s price will decline, allowing them to buy it back at a lower price in the future. Market participants closely watch the most shorted stocks as they can be indicative of market sentiment or potential volatility. Based on the latest data from MarketWatch, here are the stocks with the highest short interest as of March 28, 2024.

1. IMAC Holdings Inc. (NASDAQ: BACK)

Price: $3.30
1-Day Change: +6.80%
Year-To-Date Change: +49.32%
Short Interest: 880,148 shares
Percent of Float Shorted: 93.92%

IMAC Holdings stands out with a massive 93.92% of its float being shorted, indicating significant bearish sentiment despite a strong year-to-date performance.

🚨🤯Shares of $BACK are up 9% pre market following a close 6.80% yesterday.

According to MarketWatch, $BACK has a float of around 937k and 93% of the float is short. pic.twitter.com/GsQlF5oYpj
— Lusso's News (@LussosNews) April 24, 2024

2. XTI Aerospace Inc. (OTC: XTIA)

Price: $2.86
1-Day Change: +5.15%
Year-To-Date Change: -49.11%
Short Interest: 381,503 shares
Percent of Float Shorted: 78.91%

XTI Aerospace has seen nearly 79% of its float shorted amidst a substantial decline in its stock price this year.

3. SunPower Corp. (NASDAQ: SPWR)

Price: $1.96
1-Day Change: -8.41%
Year-To-Date Change: -59.42%
Short Interest: 39,254,967 shares
Percent of Float Shorted: 76.64%

SunPower, a solar energy company, faces skepticism with over three-quarters of its float shorted following a sharp drop in its stock price.

4. BYND Cannasoft Enterprises Inc. (NASDAQ: BCAN)

Price: $0.97
1-Day Change: +6.61%
Year-To-Date Change: -98.50%
Short Interest: 410,370 shares
Percent of Float Shorted: 75.67%

BYND Cannasoft has witnessed an extreme decline in its price this year, coupled with a high short interest.

5. B. Riley Financial Inc. (NASDAQ: RILY)

Price: $21.72
1-Day Change: +0.84%
Year-To-Date Change: +3.48%
Short Interest: 12,260,125 shares
Percent of Float Shorted: 75.47%

B. Riley Financial appears more resilient, showing a positive year-to-date return, yet it still faces significant short pressure.

Other Notable Mentions:

Biomea Fusion Inc. (NASDAQ: BMEA), Arbor Realty Trust Inc. (NYSE: ABR), and MicroCloud Hologram Inc. (NASDAQ: HOLO) also feature in the top 10 most shorted stocks, with short interests ranging from 41% to 48%.

Analysis:

Investors short sell stocks for various reasons, including speculation on price declines or hedging against potential downturns. The companies listed above are experiencing significant short interest, which could lead to price volatility, particularly if there is a sudden positive shift in their fundamentals, possibly leading to a short squeeze.

It’s essential for investors to conduct thorough research and consider multiple factors when investing in or short selling stocks, especially those with high short interest, as they can be particularly volatile.

Markets

Understanding a Flash Crash in the Stock Market

Published

4 weeks ago

April 19, 2024

Sir Chartist

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In the fast-paced world of finance, few events can instill as much immediate fear and confusion as a “flash crash.” This term describes an event where stock prices plummet sharply within an extremely short period—often just minutes—before often rebounding just as quickly. These rapid and dramatic movements can result in substantial market disruptions, affecting a wide range of assets including stocks, bonds, and commodities.

Origins of a Flash Crash

The concept of a flash crash became widely recognized after the most notorious example, which occurred on May 6, 2010. During this event, the Dow Jones Industrial Average fell about 1,000 points (over 9%) only to recover those losses within minutes. This sudden plunge and recovery highlighted inherent vulnerabilities in the market structures and systems.

Causes of Flash Crashes

Flash crashes can be triggered by a variety of factors, which often interact in complex ways:

High-Frequency Trading (HFT): Many analysts attribute the rise of flash crashes to the increase in high-frequency trading, where firms use algorithms to execute millions of orders at lightning speed. These algorithms can sometimes create feedback loops if they start to sell off assets in a falling market, amplifying the initial decline.
Market Structure Issues: The fragmentation of trading venues and the varying rules and technologies used by these platforms can also contribute to flash crashes. Disparities in trading rules and protocols can lead to situations where automated systems behave unpredictively or inefficiently.
Liquidity Crunches: Flash crashes are often exacerbated by a sudden lack of liquidity. As prices begin to fall, automatic stop-loss orders can trigger further selling, but if there aren’t enough buyers, prices can drop precipitously.
News and Social Media: Sometimes, an erroneous news report or a significant surge in social media activity can spur rapid trading actions by algorithms that parse news and data for trading signals.

Impact and Responses

The impact of a flash crash is broad. In the short term, investors can see huge losses, and confidence in the markets can wane. For traders, the volatility can result in significant financial damage, especially for those who are unable to react quickly enough to the abrupt price changes.

In response to flash crashes, regulatory bodies have implemented several measures to prevent or mitigate their effects. For example, after the 2010 crash, the U.S. Securities and Exchange Commission (SEC) introduced “circuit breakers” that temporarily halt trading in a stock if its price drops too quickly.

Preventative Measures

Beyond regulatory changes, there’s also a push for improved risk management strategies within trading firms, especially those employing high-frequency trading algorithms. These measures include more sophisticated and robust systems to monitor and control trading activities and improved testing of algorithms to ensure they behave as expected during market stress.

The Ever-Evolving Market Dynamics

As markets evolve and the use of technology deepens, the potential for flash crashes remains significant. This necessitates continuous advances in both technology and regulation to safeguard against the risks posed by these rapid and unpredictable market events.

Understanding flash crashes is crucial for anyone involved in the trading world, from regulators and traders to ordinary investors trying to navigate the complexities of modern financial markets. Recognizing the signs and potential triggers of flash crashes can help market participants better prepare for and potentially avoid the risks associated with these startling events.

Markets

A Glimpse Into the Buzz of Upcoming IPOs in April 2024

Published

4 weeks ago

April 19, 2024

Sir Chartist

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The investment atmosphere is heating up with a series of intriguing initial public offerings (IPOs) set to hit the market in late April 2024. This month features a diverse lineup of companies poised to go public, ranging from technology innovators to international restaurant chains. Here’s a detailed look at some of the most anticipated IPOs.

Tungray Technologies Inc. (TRSG)

Exchange: NASDAQ Capital
Price: $4.00
Shares: 1,250,000
Expected IPO Date: 4/19/2024
Offer Amount: $5,000,000
Tungray Technologies is stepping into the public market with a modest offer amount. The company’s focus on innovative tech solutions might attract investors looking for new growth opportunities in the tech sector.

RanMarine Technology B.V. (RAN)

Exchange: NASDAQ Capital
Price: $5.50
Shares: 1,435,000
Expected IPO Date: 4/19/2024
Offer Amount: $9,076,375
RanMarine Technology, known for its advanced marine technology solutions, is also set for the same date. With a slightly higher offer amount, it shows potential for considerable market interest.

Sushi Ginza Onodera, Inc. (ONDR)

Exchange: NYSE MKT
Price Range: $7.00-$8.00
Shares: 1,066,667
Expected IPO Date: 4/19/2024
Offer Amount: $9,813,336.40
Offering a culinary twist to the IPO scene, Sushi Ginza Onodera is preparing to serve not just premium sushi but also potentially premium stock value.

mF International Ltd (MFI)

Exchange: NASDAQ Capital
Price Range: $4.00-$5.00
Shares: 1,560,000
Expected IPO Date: 4/22/2024
Offer Amount: $8,970,000
This global firm is entering the market with a flexible price range, suggesting a cautious yet optimistic approach towards investor reception.

YY Group Holding Ltd. (YYGH)

Exchange: NASDAQ Capital
Price Range: $4.00-$5.00
Shares: 1,500,000
Expected IPO Date: 4/22/2024
Offer Amount: $8,625,000
YY Group is another promising prospect with its roots in technology and digital transformation, aiming to capture the tech-savvy investor’s eye.

Key Mining Corp. (KMCM)

Exchange: NYSE MKT
Price: $2.25
Shares: 4,444,444
Expected IPO Date: 4/25/2024
Offer Amount: $11,499,999.80
Diving into natural resources, Key Mining is set for a significant offering, indicating robust investor confidence in its mining operations and commodity potential.

Marex Group plc (MRX)

Exchange: NASDAQ Global Select
Price Range: $18.00-$21.00
Shares: 15,384,615
Expected IPO Date: 4/25/2024
Offer Amount: $371,538,447
As one of the heaviest hitters this month, Marex Group plc commands attention with its substantial offer amount, reflecting its established market presence and investor trust.

Rubrik, Inc. (RBRK)

Exchange: NYSE
Price Range: $28.00-$31.00
Shares: 23,000,000
Expected IPO Date: 4/25/2024
Offer Amount: $819,950,000
Rubrik stands out with a massive offer, targeting tech investors interested in data management and cloud services, marking it as one of the blockbuster listings of the month.

Loar Holdings, LLC (LOAR)

Exchange: NYSE
Price Range: $24.00-$26.00
Shares: 11,000,000
Expected IPO Date: 4/26/2024
Offer Amount: $328,900,000
Loar Holdings is geared up to make a significant impact with its sizable offer, highlighting its robust positioning in the manufacturing sector.

ZenaTech, Inc. (ZENA)

Exchange: NASDAQ Capital
Expected IPO Date: 4/30/2024
Offer Amount: $7,100,900
Wrapping up the month, ZenaTech will test waters with a strategic focus on tech innovations, appealing to niche investors keen on cutting-edge technologies.

April 2024 is shaping up to be a dynamic month for the IPO market, showcasing a wide range of sectors and opportunities. Investors are advised to keep an eye on these dates and delve deeper into each company’s prospects before making investment decisions. Each of these companies presents unique opportunities and challenges, marking another exciting chapter in the financial markets.