Head-To-Head Review: Digital Turbine (APPS) versus Acacia Research (ACTG)

Digital Turbine (NASDAQ: APPS) and Acacia Research (NASDAQ:ACTG) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, risk, earnings, valuation, analyst recommendations, dividends and institutional ownership.

Earnings and Valuation

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This table compares Digital Turbine and Acacia Research’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Digital Turbine $91.55 million 1.72 -$24.26 million ($0.36) -5.81
Acacia Research $65.40 million 2.71 $22.18 million $2.97 1.18

Acacia Research has lower revenue, but higher earnings than Digital Turbine. Digital Turbine is trading at a lower price-to-earnings ratio than Acacia Research, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations and price targets for Digital Turbine and Acacia Research, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digital Turbine 0 0 4 0 3.00
Acacia Research 1 0 1 0 2.00

Digital Turbine currently has a consensus target price of $1.83, suggesting a potential downside of 12.68%. Acacia Research has a consensus target price of $6.50, suggesting a potential upside of 85.71%. Given Acacia Research’s higher possible upside, analysts plainly believe Acacia Research is more favorable than Digital Turbine.

Risk & Volatility

Digital Turbine has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500. Comparatively, Acacia Research has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500.

Insider and Institutional Ownership

22.6% of Digital Turbine shares are held by institutional investors. Comparatively, 65.8% of Acacia Research shares are held by institutional investors. 5.8% of Digital Turbine shares are held by company insiders. Comparatively, 7.7% of Acacia Research shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Digital Turbine and Acacia Research’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Digital Turbine -18.66% -22.65% -11.95%
Acacia Research 33.91% 50.06% 46.80%

Summary

Acacia Research beats Digital Turbine on 10 of the 14 factors compared between the two stocks.

About Digital Turbine

Digital Turbine, Inc., through its subsidiaries, provides media and mobile communication solutions for mobile operators, app advertisers, device original equipment manufacturers, and other third parties worldwide. It operates through two segments, Advertising and Content. The Advertising segment offers Ignite, a mobile application management software to control, manage, and monetize the applications that are installed on mobile devices; Discover software, which provides application installation and management, as well as detailed reporting to advertisers and carriers; and mobile user acquisition platform that allows mobile advertisers to engage with right customers for their applications. This segment also provides syndicated network service, which accesses mobile ad inventory through publishers, including direct developer relationships, mobile Websites, mobile carriers, and mediated relationships; and programmatic advertising services. The Content segment offers Marketplace, an application and content store that manages the retailing of mobile content, including features, such as merchandising, product placements, reporting, pricing, promotions, and distribution of digital goods, as well as the distribution and licensing of content across various categories comprising music, applications, wallpapers, eBooks, and games; and Pay, an application programming interface that integrates billing infrastructure between mobile operators and content publishers to facilitate mobile commerce. The company was formerly known as Mandalay Digital Group, Inc. and changed its name to Digital Turbine, Inc. in January 2015. Digital Turbine, Inc. was incorporated in 1998 and is headquartered in Austin, Texas.

About Acacia Research

Acacia Research Corporation, through its subsidiaries, invests in, licenses and enforces patented technologies. The Company’s operating subsidiaries partner with inventors and patent owners, applying their legal and technology expertise to patent assets to unlock the financial value in their patented inventions. The Company’s operating subsidiaries assist patent owners with the prosecution and development of their patent portfolios, the protection of their patented inventions from unauthorized use, the generation of licensing revenue from users of their patented technologies and, where necessary, with the enforcement against unauthorized users of their patented technologies through the filing of patent infringement litigation. The Company’s operating subsidiaries own or control the rights to multiple patent portfolios, which include the United States patents and certain foreign counterparts, covering technologies used in a range of industries.

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