Core Insights - The Zacks Internet Software industry is experiencing volatility due to fears of AI disrupting the traditional SaaS space, alongside heightened geopolitical risks and tariff uncertainties. However, companies like MongoDB, Digital Turbine, and 8x8 are benefiting from increased demand for digital transformation and cloud solutions driven by the need for remote working and AI-powered applications [1] Industry Overview - The Zacks Internet Software industry includes companies that provide application performance monitoring, infrastructure and application software, DevOps deployment, and security software. The primary revenue sources are subscription and advertising, targeting various end markets such as banking, education, and healthcare [2] Trends Shaping the Industry - **Adoption of SaaS Grows**: The industry benefits from the demand for digital transformation, with SaaS providing a flexible and cost-effective delivery method for applications, enhancing customer satisfaction and retention [3] - **Pay-As-You-Go Model Gains Traction**: The customer-centric approach allows users to scale offerings according to needs, with the subscription model ensuring recurring revenues and affordability for small and medium-sized businesses [4] - **Ongoing Transition to Cloud Creates Opportunities**: The need for secure cloud platforms amid rising cyberattacks drives demand for web-based cybersecurity software and performance management tools [5] Industry Performance - The Zacks Internet Software industry holds a Zacks Industry Rank of 139, placing it in the bottom 43% of over 250 Zacks industries, indicating dull near-term prospects [6][7] - The industry has underperformed the S&P 500 and the broader Computer and Technology sector, returning 16.9% over the past year compared to the S&P 500's 17.2% and the sector's 23.1% [10] Current Valuation - The industry is currently trading at a forward 12-month price-to-sales (P/S) ratio of 4.09X, lower than the S&P 500's 5.30X and the sector's 6.8X, with historical trading ranging from 4.09X to 5.99X over the past five years [13] Company Highlights - **MongoDB**: This company has seen a 29% year-over-year revenue increase in Q2 of fiscal 2026, adding over 5,000 customers in the past two quarters. Its shares have appreciated 29% in the past year, with a consensus estimate for fiscal 2027 earnings at $5.61 per share [17][18][19] - **Digital Turbine**: Expected revenues for fiscal 2026 are projected between $553 million and $558 million, with shares dropping 24% in the past year. The consensus estimate for fiscal 2026 earnings is 36 cents per share [22][23] - **8x8**: This company has experienced nearly 60% year-over-year growth in usage-based offerings, with shares down 19% over the past year. The consensus estimate for fiscal 2026 earnings is also 36 cents per share [26][27]

Core Viewpoint - Digital Turbine (APPS) is currently viewed as a more attractive undervalued stock compared to Zoom Communications (ZM) based on various financial metrics and rankings [1][3][6]. Group 1: Zacks Rank and Earnings Outlook - Digital Turbine has a Zacks Rank of 1 (Strong Buy), indicating a positive earnings estimate revision trend, while Zoom Communications has a Zacks Rank of 2 (Buy) [3]. - The Zacks Rank system emphasizes companies with improving earnings outlooks, suggesting that APPS is likely experiencing a more favorable earnings forecast than ZM [3]. Group 2: Valuation Metrics - Digital Turbine has a forward P/E ratio of 12.28, significantly lower than Zoom Communications' forward P/E of 16.07, indicating that APPS may be undervalued relative to ZM [5]. - The PEG ratio for Digital Turbine is 0.30, while Zoom Communications has a PEG ratio of 5.60, further suggesting that APPS is a better value option considering expected earnings growth [5]. - Digital Turbine's P/B ratio stands at 2.55 compared to Zoom Communications' P/B of 3.04, reinforcing the notion that APPS is more attractively priced [6]. Group 3: Value Grades - Digital Turbine has a Value grade of B, while Zoom Communications has a Value grade of C, indicating that APPS is perceived as a stronger value investment at this time [6].

Investors might want to bet on Digital Turbine (APPS) , as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices.A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.The po ...

Core Insights - Digital Turbine (APPS) shares have declined 1.8% since the company reported its third-quarter fiscal 2026 results on February 3, 2026, primarily due to softness in U.S. device volumes impacting operations [2][4] Financial Performance - The company reported non-GAAP earnings of 16 cents per share, exceeding the Zacks Consensus Estimate by 77.78%, compared to 5 cents in the same quarter last year [2][9] - Non-GAAP revenues reached $151.4 million, reflecting a 12% year-over-year increase, driven by strong demand and effective execution [3][9] - On Device Solutions contributed 65.8% of total revenues, increasing approximately 9% year-over-year to nearly $100 million, while App Growth Platform revenues rose 19% year-over-year to $53 million, accounting for 34.8% of total revenues [3][9] - Non-GAAP gross margin expanded by 520 basis points year-over-year to 49% [5][9] - Non-GAAP EBITDA was $38.8 million, a 76% increase from $22 million in the year-ago quarter, with a non-GAAP operating margin of 14.3%, up from an operating loss of 9.5% [6][9] Cost Management - Sales and marketing expenses as a percentage of revenues decreased by 200 basis points to 9.5%, while general and administrative expenses fell from 31.8% to 19.1% [5] - Product development expenses also decreased by 100 basis points to 6.5% [5] Cash Flow and Balance Sheet - As of December 31, 2025, cash and cash equivalents were $40 million, up from $1 million as of September 30, 2025 [7] - The company generated cash flow from operations of $14.17 million, slightly down from $14.46 million in the previous quarter, and free cash flow was $6.4 million compared to $7 million in the prior quarter [7] Future Guidance - For the full fiscal year 2026, Digital Turbine expects non-GAAP revenues between $553 million and $558 million, with adjusted EBITDA projected in the range of $114 million to $117 million [10]

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. This article is intended to provide informational content and should not be viewed as an exhaustive a ...

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. This article is intended to provide informational content and should not be viewed as an exhaustive a ...

Core Insights - Premarket trading is showing notable activity with significant price movements indicating potential opportunities for traders before the market opens [1] Premarket Gainers - Silicon Laboratories Inc. (SLAB) is up 49% at $204.51 [3] - Concorde International Group Ltd. (CIGL) is up 44% at $3.90 [3] - ENvue Medical, Inc. (FEED) is up 25% at $3.08 [3] - Enphase Energy, Inc. (ENPH) is up 23% at $46.06 [3] - Digital Turbine, Inc. (APPS) is up 18% at $5.85 [3] - Tandy Leather Factory, Inc. (TLF) is up 16% at $3.35 [3] - Lumentum Holdings Inc. (LITE) is up 12% at $487.60 [3] - Super Micro Computer, Inc. (SMCI) is up 10% at $32.66 [3] - Sonos, Inc. (SONO) is up 10% at $16.17 [3] - Exicure, Inc. (XCUR) is up 9% at $4.52 [3] Premarket Losers - Intapp, Inc. (INTA) is down 16% at $24.50 [4] - Texxon Holding Limited (NPT) is down 15% at $6.08 [4] - Varonis Systems, Inc. (VRNS) is down 14% at $22.59 [4] - Mercury Systems, Inc. (MRCY) is down 11% at $88.00 [4] - Boston Scientific Corporation (BSX) is down 9% at $82.80 [4] - nLIGHT, Inc. (LASR) is down 9% at $45.10 [4] - Advanced Micro Devices, Inc. (AMD) is down 8% at $220.84 [4] - NGL Energy Partners LP (NGL) is down 7% at $10.98 [4] - MKDWELL Tech Inc. (MKDW) is down 7% at $2.67 [4] - Wabash National Corporation (WNC) is down 6% at $10.54 [4]

Digital Turbine ( APPS ) reported solid results in the third quarter, leading to an unsurprising surge in its share price. Despite this, parts of Digital Turbine's business are still struggling, and growth is predominantly coming from the company's internationalRichard Durant is the leader of Narweena, an asset manager focused on finding market dislocations that are the result of a poor understanding of a businesses long-term prospects. Narweena believes that excess risk adjusted returns can be achieved by ...

Group 1 - Digital Turbine (APPS) reported solid results in the third quarter, leading to a surge in its share price [1] - Despite the positive results, parts of Digital Turbine's business are still struggling, indicating mixed performance [1] - Growth for Digital Turbine is predominantly coming from specific segments of the company [1] Group 2 - Narweena, an asset manager led by Richard Durant, focuses on identifying market dislocations due to poor understanding of long-term business prospects [1] - The firm believes excess risk-adjusted returns can be achieved by targeting businesses with secular growth opportunities in markets with barriers to entry [1] - Narweena's investment strategy is driven by the belief that an aging population and low growth will create new investment opportunities, contrasting with past trends [1] Group 3 - Many industries are expected to face stagnation or secular decline, which may paradoxically improve business performance due to reduced competition [1] - Conversely, some businesses may experience rising costs and diseconomies of scale [1] - The economy is increasingly dominated by asset-light businesses, leading to a declining need for infrastructure investments over time [1]

Group 1 - The article does not provide any relevant content regarding the company or industry [1]