Digital Turbine (APPS) and C3.ai (AI) are technology companies that operate in different markets. Fearful investors will scrutinize their high valuation in P/E and P/S, respectively. That weakens their rebound potential in the near term.
Patient investors will like APPS after it posted quarterly revenue growing by 93.7% Y/Y to $184.14 million. It earned 39 cents a share non-GAAP in Q4/2022. In Q1/2023, it expects revenue of $183 million to $187 million. Non-GAAP EPS of 34 – 35 cents is based on around 105 million diluted shares outstanding.
APPS stock plunged from $25 to around $20 after the report. Investors expected the company to include more transparency in its share-based compensation. In addition, the company issued a soft outlook. Investors should brace for weaker mobile advertising spending in the coming months.
The luster for C3 ai continued to worsen after the quarterly report. Fortunately, the stock rebounded afterward as speculators bet on a bottoming from here.
Revenue performance obligations worsened in Q4 to $489.2 million. This rose by 62% Y/Y compared to a 90% growth in the previous quarter. AI stock is no longer a high-revenue growth play. Investors will exit the AI software sector and will buy proven growth companies like Salesforce (CRM) instead.
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