Digital Turbine Inc. (APPS) shares surged more than 40% in Wednesday morning trade, reaching a 52-week high after the company reported first-quarter earnings per share of $0.19 on revenue of $166 million, beating Wall Street expectations of $0.14 EPS on $150 million revenue according to Fiscal.ai data. The rally marked the stock's best single-day gains in nearly 14 months. Analysts at Craig-Hallum attributed the performance to accelerating growth driven by AI-powered optimization and expanding advertiser demand, calling Digital Turbine "a name to own" and raising their price target to $18 from $10 while maintaining a Buy rating.
Craig-Hallum and Benchmark Raise Price Targets Following Q1 Beat
According to TheFly, analysts at Craig-Hallum highlighted Digital Turbine's ability to grow at roughly five times the broader advertising industry's pace, driven by AI-powered optimization, expanding advertiser demand and multiple long-term growth drivers. The firm raised its price target on Digital Turbine shares to $18 from $10, while keeping a Buy rating on the stock.
Analysts at Benchmark also raised their price target following the earnings report to $16 from $15, while keeping a Buy rating on the stock. According to Koyfin data, all four analysts covering the stock have a Buy rating, with an average 12-month price target of $11.
APPS was among the top trending tickers on Stocktwits at the time of writing.
CEO Bill Stone Cites AI as Revenue Driver in Fiscal 2027 Guidance Increase
CEO Bill Stone said AI is a tailwind for Digital Turbine, helping improve advertiser outcomes through the company's first-party data and AI capabilities while contributing to a shift in consumer activity from the open web toward mobile applications.
Stone added that Digital Turbine's forecast increase for the fiscal year 2027 was supported by five factors: AI and data, the company's platform flywheel, its brand advertising business, the Ignite platform and alternative application distribution. Digital Turbine now expects revenue of $650 million to $670 million in fiscal 2027, up from its prior forecast of $630 million to $650 million.
The company also reported that the annualized revenue per employee had increased from roughly $800,000 a year ago to more than $1 million due to AI-driven automation.
Beyond improving revenue per employee, Stone said AI is driving more app creation and increasing time spent in mobile apps, citing third-party data showing app releases rose 60% year-on-year between January and March while consumers now spend about five hours a day in apps. He added these trends are increasing demand for app distribution and monetization.
Retail Sentiment on Stocktwits Turns Extremely Bullish
Retail sentiment on Stocktwits around Digital Turbine trended in the "extremely bullish" territory with message volumes at "high" levels.
APPS stock is up 171% year-to-date and 149% over the past 12 months. The iShares Russell 2000 Growth ETF (IWO) is up 32% over the past 12 months, while the iShares Micro-Cap ETF (IWC) is up 49%. The Vanguard Information Technology Index Fund ETF (VGT) is up 41% during this period, while the Vanguard Russell 2000 Growth Index Fund ETF (VTWG) is up 33%.
FAQ
What were Digital Turbine's Q1 earnings results?
Digital Turbine reported earnings per share of $0.19 in the first quarter on revenue of $166 million, surpassing Wall Street expectations of $0.14 EPS on $150 million revenue according to Fiscal.ai data.
What price targets did analysts set for APPS stock?
Craig-Hallum raised its price target on Digital Turbine shares to $18 from $10 while maintaining a Buy rating. Benchmark raised its target to $16 from $15, also keeping a Buy rating. All four analysts covering the stock have a Buy rating, with an average 12-month price target of $11 according to Koyfin data.
How did Digital Turbine revise its fiscal 2027 revenue guidance?
Digital Turbine raised its fiscal 2027 revenue forecast to $650 million to $670 million, up from its prior forecast of $630 million to $650 million, supported by AI and data, the company's platform flywheel, its brand advertising business, the Ignite platform and alternative application distribution.
