Critical Survey: Digital Turbine (APPS) vs. Dolby Laboratories (DLB)

Digital Turbine (NASDAQ: APPS) and Dolby Laboratories (NYSE:DLB) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, valuation, earnings, analyst recommendations, risk and institutional ownership.

Earnings and Valuation

This table compares Digital Turbine and Dolby Laboratories’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Digital Turbine $74.75 million 1.68 -$52.85 million ($0.05) -33.00
Dolby Laboratories $1.08 billion 6.31 $201.80 million $2.20 29.80



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

Volatility and Risk

Digital Turbine has a beta of 1.45, meaning that its stock price is 45% more volatile than the S&P 500. Comparatively, Dolby Laboratories has a beta of 0.76, meaning that its stock price is 24% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Digital Turbine and Dolby Laboratories, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digital Turbine 0 0 2 0 3.00
Dolby Laboratories 0 3 2 0 2.40

Digital Turbine presently has a consensus target price of $1.90, indicating a potential upside of 15.15%. Dolby Laboratories has a consensus target price of $65.20, indicating a potential downside of 0.55%. Given Digital Turbine’s stronger consensus rating and higher possible upside, analysts plainly believe Digital Turbine is more favorable than Dolby Laboratories.

Institutional & Insider Ownership

32.0% of Digital Turbine shares are held by institutional investors. Comparatively, 53.9% of Dolby Laboratories shares are held by institutional investors. 5.8% of Digital Turbine shares are held by insiders. Comparatively, 43.7% of Dolby Laboratories shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Digital Turbine and Dolby Laboratories’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Digital Turbine -46.78% -11.97% -5.67%
Dolby Laboratories 7.64% 12.73% 10.65%

Dividends

Dolby Laboratories pays an annual dividend of $0.64 per share and has a dividend yield of 1.0%. Digital Turbine does not pay a dividend. Dolby Laboratories pays out 29.1% of its earnings in the form of a dividend. Dolby Laboratories has increased its dividend for 3 consecutive years.

Summary

Dolby Laboratories beats Digital Turbine on 12 of the 16 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 Dolby Laboratories

Dolby Laboratories, Inc. creates audio and imaging technologies that transform entertainment and communications at the cinema, at home, at work, and on mobile devices. The company develops and licenses its audio technologies, including Dolby Digital Plus for digital television, mobile, and Internet-based services; Dolby Digital, a digital audio coding technology that provides multichannel sound in the home; and AAC & HE-AAC, an audio coding technologies used to broadcast, download, and streaming content. Its audio technologies also comprise Dolby TrueHD, an audio coding technology for content providers; Dolby Atmos, an object-oriented audio technology for home theaters, device speakers, and headphones; Dolby AC-4, a digital audio coding system that addresses the current and future needs of broadcast and streaming entertainment services; Dolby Voice, an audio conferencing technology; and Dolby Vision, an imaging technology for cinema, digital television, and other consumer devices, as well as HEVC, a digital video codec with higher bandwidth efficiency used in a range of media devices. In addition, the company designs and manufactures audio and imaging products, such as digital cinema servers, Dolby Cinema audio products, and other products for the film production, cinema, television, broadcast, and entertainment industries. Further, it offers an array of services to support theatrical and television production for cinema exhibition, broadcast, and home entertainment. The company serves film studios, content creators, post-production facilities, cinema operators, broadcasters, and video game designers. It sells its products directly to the end users, as well as through dealers and distributors worldwide. Dolby Laboratories, Inc. was founded in 1965 and is headquartered in San Francisco, California.

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