APPS
Digital Turbine, Inc.
$8.45
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 189.0% above fair value
You pay
$8.45
Bear
$0.00
Fair
$2.92
Bull
$8.62
Bear
$0.00
-100.0%
10% stage 1 growth, 12% discount
Fair
$2.92
-65.4%
16% stage 1 growth, 12% discount
Bull
$8.62
+2.0%
21% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (16% base case)
Terminal Value % of EV
39%
Implied Market Multiple
94.8x
Market is pricing in (growth)
32.1%
vs 16.3% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $11.50 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $2.92 per share.
Warnings
Wall Street's average price target is $11.50 (from 11 analysts). Our estimate is 93% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions