Shares of Digital Turbine (APPS -1.91%) sank 27.6% in January, according to data from S&P Global Market Intelligence. There wasn't any major company-specific news behind the sell-off, but the stock lost ground in a tough month for the broader market.
The S&P 500 index fell 5.3% in January, and the Nasdaq Composite was down 9%. Risk factors including a potential Russian invasion of Ukraine, rising interest rates, rising Treasury bond yields, and elevated inflation all combined to create a challenging trading backdrop for growth-dependent tech stocks last month, and Digital Turbine lost more than a quarter of its value in the pullback.
January served up a perfect storm of risk factors for investors, and it's not surprising that growth-dependent tech stocks in particular were hard hit. Digital Turbine was also coming off some big gains, having climbed 15% in December, and those gains likely set the stage for a market-lagging pullback last month. Investors have generally become much more cautious about growth stocks, and the trend has been a major factor in the stock performance for the mobile-applications software company over the last year.
Digital Turbine stock has continued to lose ground early in February's trading. The company's share price is down roughly 2.9% in the month so far.
The Nasdaq Composite index is down roughly 1.7% in February due to uneven Big Tech earnings, and the pressure has affected Digital Turbine stock. While Amazon's subsequent fourth-quarter report was better than expected and helped calm the market, Meta Platforms arrived on Feb. 2 with a wider-than-expected loss and weak guidance that shocked investors and triggered a wave of intense sell-offs for tech stocks.
Digital Turbine has a third-quarter earnings release and conference call scheduled for after the market closes on Tuesday. In its last guidance, management called for adjusted earnings per share between $0.41 and $0.44 on revenue between $350 million and $355 million in the period.
The company now has a market capitalization of roughly $4.3 billion and is valued at approximately 27 times this year's expected sales and 3.5 times expected sales.