Cardlytics (CDLX) AI Stock Analysis

• Market Cap: $77.22M
• Dividend Yield: N/A
• Average Volume (3M): 1.24M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.56
• Revenue Growth: -10.00%
• EPS Growth: -11.58%
• Country: US
• Employees: 454
• Sector: Communication Services
• Sector Strength: 79
• Industry: Advertising Agencies
• EPS (TTM): -3.85
• Shares Outstanding: 52,174,480
• 10 Day Avg. Volume: 921,676
• 30 Day Avg. Volume: 1,240,976
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.46
• Price to Cash Flow (P/CF): 10.80
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $3.30
• Price Target Upside: 134.04% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

Cardlytics is facing significant financial and operational challenges, reflected in declining revenues and profitability issues. Despite some positive developments in the earnings call, such as exceeding Q4 guidance and positive adjusted EBITDA, the overall outlook remains cautious due to negative growth expectations and high leverage. Technical indicators also suggest bearish momentum, and the valuation metrics do not provide a compelling case for investment.

Positive Factors

Financial Confidence

The balance sheet update was constructive and gives more confidence that there is enough runway for CDLX to execute on its turnaround.

Financial Performance

CDLX made continued progress in Q4 on campaign delivery issues and drove higher than expected pipeline wins, helping to offset anticipated spend reductions from key accounts in the restaurant and travel verticals; along with strong OpEx discipline, revenue upside resulted in a relatively strong Q4 EBITDA beat.

Pricing Model Transition

The adoption of engagement-based pricing increased to 61% of advertisers, up from 51% last quarter, with 90%+ new brands adopting this model in Q4, showing improved visibility.

Negative Factors

Debt and Cash Flow

A sizable net debt position and expectations for ongoing cash burn raise concerns.

Delivery Challenges

Delivery challenges remain a significant revenue headwind near term.

Outlook

Mgmt’s Q1 outlook was muted and mgmt commentary for the remainder of FY25 suggests to us a more gradual billings rebound than we had previously expected.

Cardlytics Business Overview & Revenue Model

Company Description

Cardlytics (CDLX) is a digital advertising platform that specializes in providing transaction-driven marketing solutions. The company operates primarily in the fintech and advertising sectors, leveraging its unique access to purchase data to offer banks and marketers insights into consumer behavior. Cardlytics partners with financial institutions to provide their clients with personalized cash-back offers directly within their online and mobile banking applications.

How the Company Makes Money

Cardlytics makes money by partnering with financial institutions to use their purchase data to create targeted marketing campaigns. These campaigns are funded by advertisers who pay Cardlytics to deliver personalized offers to consumers based on their purchasing behavior. Cardlytics earns revenue by charging advertisers a fee for each transaction that occurs as a result of a consumer redeeming an offer. Additionally, they may have revenue-sharing agreements with their banking partners, where they share a portion of the fees collected from advertisers. Key partnerships with major banks are significant contributors to the company's earnings, as they provide access to a large and diverse consumer base.

Cardlytics Financial Statement Overview

Summary

Cardlytics faces significant financial challenges with declining revenues, high leverage, and negative cash flow trends. The company is struggling with profitability and cash generation, presenting risks in its financial stability.

Income Statement

The company's revenue has decreased over the last year, reflecting a negative growth rate of approximately -9.99%. Gross profit margin is not applicable as gross profit equals total revenue. The net profit margin is significantly negative, indicating substantial losses. EBIT and EBITDA margins are also negative, showing operational challenges.

Balance Sheet

The debt-to-equity ratio stands at 3.17, indicating high leverage and potential risk. The equity ratio is low, at 17.83%, suggesting limited equity buffer. Return on equity is negative due to net losses, reflecting poor profitability.

Cash Flow

Free cash flow has declined, showing a negative growth trend. The operating cash flow to net income ratio is negative, indicating cash flow issues. Free cash flow to net income ratio also reflects negative performance, highlighting cash generation challenges.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
278.30M	309.20M	298.54M	267.12M	186.89M
	Gross Profit
120.89M	130.38M	112.63M	103.34M	63.27M
	EBIT
-195.50M	-135.67M	-135.54M	-96.85M	-53.92M
	EBITDA
-152.53M	-99.00M	-418.98M	-89.91M	-39.51M
	Net Income Common Stockholders
-189.30M	-134.70M	-465.26M	-128.56M	-58.47M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
65.59M	91.83M	121.91M	233.47M	293.24M
	Total Assets
392.71M	574.14M	691.24M	1.26B	422.54M
	Total Debt
221.65M	266.11M	235.26M	197.23M	188.12M
	Net Debt
156.06M	174.28M	113.36M	-36.24M	-105.12M
	Total Liabilities
322.72M	439.35M	479.63M	573.10M	265.35M
	Stockholders Equity
69.99M	134.80M	211.60M	690.70M	157.19M
Cash Flow		Free Cash Flow
-8.82M	-12.58M	-67.39M	-51.09M	-17.71M
	Operating Cash Flow
-8.82M	-185.00K	-53.90M	-38.52M	-7.60M
	Investing Cash Flow
-18.75M	-10.06M	-15.76M	-506.69M	-10.12M
	Financing Cash Flow
1.44M	-20.03M	-39.99M	486.00M	206.43M

Cardlytics Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.41
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CDLX, the sentiment is Negative. The current price of 1.41 is below the 20-day moving average (MA) of 1.84, below the 50-day MA of 2.39, and below the 200-day MA of 4.01, indicating a bearish trend. The MACD of -0.30 indicates Positive momentum. The RSI at 34.45 is Neutral, neither overbought nor oversold. The STOCH value of 30.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CDLX.

Cardlytics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DLX	66 Neutral	$653.32M	12.38	8.61%	8.21%	-3.22%	99.58%
Sector *	58 Neutral	$26.25B	2.79	-10.85%	4.33%	2.15%	-44.22%
TSQ	47 Neutral	$112.35M	―	74.55%	11.33%	-0.72%	67.36%
MCHX	46 Neutral	$60.33M	―	-14.44%	―	-3.58%	50.73%
INUV	45 Neutral	$52.71M	―	-37.84%	―	13.37%	50.36%
CDLX	43 Neutral	$77.22M	―	-184.87%	―	-10.00%	-11.58%
FLNT	34 Underperform	$45.42M	―	-98.64%	―	-14.67%	59.39%

Cardlytics Corporate Events

Cardlytics Appoints Srishti Gupta to Board of Directors

Cardlytics, Inc. has appointed Srishti Gupta as a new director and member of its nominating and corporate governance committee, marking a strategic move for the company. With an impressive background as Chief Product Officer at Integral Ad Science and previous roles at Rokt, Amazon, and IRI, Gupta brings extensive experience to the table. Her compensation includes restricted stock units and annual retainers, aligning her interests with shareholders. This appointment is poised to enhance Cardlytics’ governance and product strategy, drawing interest from investors keen on strong leadership in the financial markets.