Digital Turbine: Don't Look Under The Hood (Rating Downgrade)

Digital Turbine is rated a "Sell" due to deteriorating underlying financials despite headline revenue and earnings beats. APPS faces substandard margins, high debt, and free cash flow challenges, with interest expense exceeding operating income in FY26. Management's FY27 guidance implies continued double-digit growth, but margin expansion remains far more critical to valuation than growth.