Is Digital Turbine, Inc. overvalued or undervalued?

As of 8 August 2023, the valuation grade for Digital Turbine, Inc. has moved from expensive to risky, indicating a shift in perception regarding its financial health. The company appears to be overvalued, with a Price to Book Value of 3.63, an EV to EBITDA ratio of 38.38, and a troubling ROE of -70.18%. In comparison, peers such as Matterport, Inc. have a significantly lower EV to EBITDA of -10.1636, while Cerence, Inc. shows a much higher EV to EBITDA of 32.5016, highlighting the disparity in valuation metrics within the sector.
Despite a strong year-to-date return of 215.98% compared to the S&P 500's 12.22%, the long-term performance shows a concerning trend, with a 5-year return of -83.71% against the S&P 500's 96.61%. This suggests that while the stock has recently gained momentum, its overall valuation does not align with its financial fundamentals, reinforcing the view that Digital Turbine, Inc. is overvalued.