Reviewing RPX (RPXC) and Digital Turbine (APPS)

RPX (NASDAQ: RPXC) and Digital Turbine (NASDAQ:APPS) are both small-cap business services companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, dividends and valuation.

Profitability

This table compares RPX and Digital Turbine’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RPX -27.00% 5.04% 3.62%
Digital Turbine -18.66% -22.65% -11.95%

Risk and Volatility

RPX has a beta of 1.34, suggesting that its share price is 34% more volatile than the S&P 500. Comparatively, Digital Turbine has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500.

Dividends

RPX pays an annual dividend of $0.10 per share and has a dividend yield of 1.0%. Digital Turbine does not pay a dividend.

Insider & Institutional Ownership

84.8% of RPX shares are held by institutional investors. Comparatively, 22.2% of Digital Turbine shares are held by institutional investors. 3.5% of RPX shares are held by insiders. Comparatively, 4.8% of Digital Turbine shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares RPX and Digital Turbine’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RPX $330.46 million 1.58 -$79.14 million N/A N/A
Digital Turbine $91.55 million 1.39 -$24.26 million ($0.36) -4.69

Digital Turbine has lower revenue, but higher earnings than RPX.

Analyst Ratings

This is a breakdown of recent ratings and target prices for RPX and Digital Turbine, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RPX 1 0 1 0 2.00
Digital Turbine 0 0 3 0 3.00

RPX presently has a consensus price target of $14.50, suggesting a potential upside of 39.02%. Digital Turbine has a consensus price target of $1.93, suggesting a potential upside of 14.40%. Given RPX’s higher possible upside, equities research analysts clearly believe RPX is more favorable than Digital Turbine.

Summary

RPX beats Digital Turbine on 8 of the 14 factors compared between the two stocks.

About RPX

RPX Corporation provides patent risk management and discovery services in the United States, Japan, South Korea, and internationally. It offers a subscription-based patent risk management service that facilitates exchanges of value between owners and users of patents. The company also provides a defensive patent aggregation in which it acquires patent assets to offer clients with sub-licenses; and underwrites patent infringement liability insurance policies to insure against certain costs of litigation. In addition, it offers its clients with access to its proprietary patent market intelligence and data. Further, the company provides a range of technology-enabled services, including data collection and forensics, data processing and analytics, data hosting, project management, data production, and document review services to streamline the administration of litigation matters, internal and external investigations, regulatory compliance, and other matters. Its clients include companies that design, make, or sell technology-based products and services, as well as companies that use technology in their businesses; and corporations and law firms. RPX Corporation was founded in 2008 and is headquartered in San Francisco, California.

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.

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