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Is This a Buying Opportunity for Roku, Magnite, and Digital Turbine?

By Jose Najarro – Aug 23, 2021 at 11:30AM

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Fundamentals have not changed much for these three high-growth companies, but stock prices have dipped.

In today's video I look at Digital Turbine's (APPS 0.21%), Magnite's (MGNI 6.65%), and Roku's (ROKU 1.59%) most recent news and share my thoughts from a bullish and bearish perspective. Here are some highlights from the video. 

  1. Regardless of high revenue growth quarter over quarter for the past year, each of these companies has seen a decline in stock price of over 20% from the 52-week-high closing price. 
  2. The balance sheets for both Magnite and Digital Turbine have shown an increase in noncurrent debt and intangible assets and a decrease in cash and cash equivalents. The main reason is that both companies continue to make acquisitions to accelerate growth in the ad tech market. Investors should make sure that these acquisitions align with each company's long-term goals. 
  3. When you compare the forward price-to-sales ratios of all three companies, Roku is the most expensive, with a ratio of roughly 12. Roku does have the strongest balance sheet, with more cash than debt, and is the company with consistent revenue growth.

Click the video below for my full thoughts and analysis. 

*Stock prices used were the closed prices of Aug. 20, 2021. The video was published on Aug. 21, 2021.
 


  

Jose Najarro owns shares of Digital Turbine, Magnite, Inc, and Roku. The Motley Fool owns shares of and recommends Magnite, Inc and Roku. The Motley Fool has a disclosure policy. Jose is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Stocks Mentioned

Magnite Stock Quote
Magnite
MGNI
$12.66 (6.65%) $0.79
Digital Turbine Stock Quote
Digital Turbine
APPS
$18.82 (0.21%) $0.04
Roku Stock Quote
Roku
ROKU
$60.73 (1.59%) $0.95

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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