Financial Analysis: Digital Turbine (APPS) vs. Quarterhill (QTRH)

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

Profitability

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

Net Margins Return on Equity Return on Assets
Digital Turbine -46.78% -15.32% -7.26%
Quarterhill 3.89% 21.36% 17.74%

Volatility & Risk

Digital Turbine has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500. Comparatively, Quarterhill has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Digital Turbine and Quarterhill, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digital Turbine 0 0 2 0 3.00
Quarterhill 0 0 1 0 3.00

Digital Turbine currently has a consensus target price of $1.90, indicating a potential upside of 21.79%. Given Digital Turbine’s higher probable upside, analysts plainly believe Digital Turbine is more favorable than Quarterhill.

Institutional and Insider Ownership

31.6% of Digital Turbine shares are held by institutional investors. Comparatively, 14.9% of Quarterhill shares are held by institutional investors. 5.8% of Digital Turbine shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Quarterhill pays an annual dividend of $0.04 per share and has a dividend yield of 3.6%. Digital Turbine does not pay a dividend. Quarterhill pays out 7.7% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Digital Turbine and Quarterhill’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Digital Turbine $74.75 million 1.59 -$52.85 million ($0.09) -17.33
Quarterhill $134.71 million 0.97 $10.22 million $0.52 2.12

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

Summary

Quarterhill beats Digital Turbine on 8 of the 15 factors compared between the two stocks.

Digital Turbine Company Profile

Digital Turbine, Inc., through its subsidiaries, provides media and mobile communication solutions for mobile operators, application developers, device original equipment manufacturers, and other third parties worldwide. The company offers Ignite, a mobile application management software to control, manage, and monetize the applications that are installed on mobile devices and professional services directly related to the ignite platform. It also provides Discover software, which provides application installation and management, as well as detailed reporting to advertisers and carriers. In addition, the company offers other products and professional services directly related to the Ignite platform. Digital Turbine, Inc. is headquartered in Austin, Texas.

Quarterhill Company Profile

Quarterhill Inc. focuses on acquisition and management of technology companies that provides products and services worldwide. Its Technology segment licenses patent technologies to approximately 355 companies. Its patent portfolios include patents relating to 3D television, phased loop semiconductor, semiconductor manufacturing and packaging, medical stent, intelligent personal assistant, streaming video, semiconductor clocking, LED lighting, smart meter monitoring, non-volatile flash memory and other memory, building automation, enhanced image processing, computer gaming, and various other technologies; automotive headlight assemblies, microcontrollers applicable to safety-critical aerospace, and CMOS image sensors; and medical, industrial, and automotive applications. Its Mobility segment provides automated truck weigh stations; toll road systems and equipment; traffic management and safety systems; VectorSense, a tire sensor suite; Vehicle Information-In-Motion, a traffic intelligence system; integrated traffic control systems; permanent and portable slow speed weigh-in-motion systems; portable wheel load scales; traffic data collection products; vehicle and axle detection equipment; and automated vehicle identification, and other hardware and software products. It serves intelligent transportation systems industry through salespeople, distributors, agents, other contractors, and systems integrators, as well as directly. Its Factory segment creates and licenses enterprise asset management (EAM) software solutions to asset intensive industries through its salesforce, as well as Internet. It offers WorkAlign, a product suite, which consists of integrated products, such as scheduler, IIoT, mobile for EAM, maintenance budgeting, warranty tracker, and analytics; and consulting services. The company was formerly known as Wi-LAN Inc. and changed its name to Quarterhill Inc. in June 2017. Quarterhill Inc. was incorporated in 1992 and is headquartered in Ottawa, Canada.

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