Digital Turbine (NASDAQ:APPS) and ARC Group (OTCMKTS:ARCK) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Profitability

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

Net Margins Return on Equity Return on Assets
Digital Turbine -38.14% -15.28% -6.10%
ARC Group 5.70% -18.19% 3.06%

Earnings & Valuation

This table compares Digital Turbine and ARC Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Digital Turbine $74.75 million 2.29 -$52.85 million ($0.09) -24.44
ARC Group $4.45 million 2.00 $340,000.00 N/A N/A

ARC Group has lower revenue, but higher earnings than Digital Turbine.

Risk & Volatility

Digital Turbine has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, ARC Group has a beta of -0.04, suggesting that its stock price is 104% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Digital Turbine and ARC Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digital Turbine 0 0 2 0 3.00
ARC Group 0 0 0 0 N/A

Digital Turbine presently has a consensus target price of $3.40, suggesting a potential upside of 54.55%. Given Digital Turbine’s higher possible upside, research analysts clearly believe Digital Turbine is more favorable than ARC Group.

Institutional and Insider Ownership

21.9% of Digital Turbine shares are owned by institutional investors. 6.2% of Digital Turbine shares are owned by company insiders. Comparatively, 12.4% of ARC Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Digital Turbine beats ARC Group on 7 of the 12 factors compared between the two stocks.

About Digital Turbine

Digital Turbine, Inc., through its subsidiaries, provides media and mobile communication solutions for mobile operators, application developers, device original equipment manufacturers, and other third parties worldwide. The company offers Ignite, a mobile application management software to control, manage, and monetize the applications that are installed on mobile devices and professional services directly related to the ignite platform. It also provides Discover software, which provides application installation and management, as well as detailed reporting to advertisers and carriers. In addition, the company offers other products and professional services directly related to the Ignite platform. Digital Turbine, Inc. is headquartered in Austin, Texas.

About ARC Group

ARC Group, Inc., together with its subsidiary, owns, operates, and franchises Dick's Wings brand of restaurants in Florida and Georgia. As of August 21, 2018, the company operated 15 restaurants in Florida and 5 restaurants in Georgia under the brand name of Dick's Wings & Grill, as well as 3 Dick's Wings concession stands in Florida. It offers a selection of chicken wings, chicken tenders, quesadillas, specialty burgers and sandwiches, salads, wraps, sauces and seasonings, flatbreads, desserts, and other baked products, as well as craft beers and wines. The company was formerly known as American Restaurant Concepts, Inc. and changed its name to ARC Group, Inc. in June 2014. ARC Group, Inc. was founded in 2000 and is headquartered in Jacksonville, Florida.

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