Digital Turbine (APPS -11.69%) stock got hit hard with sell-offs in this week's trading. The company's share price closed out the stretch down 31.7% from the previous week's market close, according to data from S&P Global Market Intelligence.
Digital Turbine stock had been on a hot streak following the company's fourth-quarter earnings report earlier this month, but its valuation saw a substantial pullback following a concerning demand indicator. The stock also saw sell-offs in conjunction with macroeconomic risk factors that shaped the market later in the week.
Chinese search and apps giant Baidu published its Q4 report on Wednesday, delivering sales and earnings that topped expectations. However, the company's performance on a per-segment basis had some worrying indicators for Digital Turbine. Total sales for Baidu's digital marketing businesses declined roughly 7% year over year in the period. Given Baidu's strong position in the category, the numbers raise some concerns about overall industry health at the moment.
With its own quarterly report earlier this month, Digital Turbine reported that sales fell 6% year over year to $135 million. Despite the sales decline, the stock soared following the report, thanks to its still beating expectations and management's forward guidance. But bullish sentiment moderated after Baidu signaled a weaker backdrop in China's digital marketing and apps ecosystem.
In addition to the pullback for the stock spurred by Baidu's quarterly report, Digital Turbine stock saw sell-offs as macroeconomic risk factors came into focus later in the week. Stocks sold off in Thursday's trading after Walmart issued weaker-than-expected sales guidance for this year, and bearish movement intensified in Friday's trading after tracking reports showed a decline in U.S. consumer confidence and softer-than-anticipated performance for the manufacturing and services sectors.
Despite the big valuation decline this week, Digital Turbine stock is still up roughly 96% over the last month. With the company working on a turnaround initiative and macroeconomic uncertainty on the near horizon, shares could continue to see volatile trading.
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