Cardlytics (CDLX) Reports
I am typing this bulletin extremely quickly as my internet gateway is about to be replaced and morning appointments will occupy me soon thereafter. Please pardon the lack of refinement!
The bottom line is I am upgrading Cardlytics (CDLX) to buy today for aggressive investors after the company reported last night. The report and management’s commentary was good enough to rule out a worst case scenario, for now.
Management said its purchase intelligence data is extremely helpful to marketing clients in this environment. As predicted revenue from retail, travel and restaurants has been hard hit. But an uptick in direct-to-consumer and internet retail in areas like sporting, pet supplies, grocery, beauty, etc. has helped offset those declines.
Customers are trying to figure out how and where to return to spending and Cardlytics can help.
It’s certainly not all great out there. But management said it will continue to invest in the platform and move ahead with projects like the self-serve project, which should help pull in more marketers. No forward guidance was given due to the pandemic (no surprise).
The headline numbers were that revenue was up 26.5% to $45.5 million and beat by $2.5 million while adjusted EPS of -$0.26 missed consensus by $0.04.
Key to buying this stock right now is an understanding that Cardlytics remains tethered to consumer spending but at 56% off its high and with a (hopeful) scenario of a really bad situation getting better, and eventually returning to good, patient investors will do well by buying now. Also relevant is that stocks have been going up despite all the poor economic data and I believe investors will flood back into CDLX at this point and push it substantially higher. The caveat is that if stocks can’t maintain the recent strength CDLX could easily pull back quite a bit.
In short, it’s a buy for aggressive investors now and I’ll keep a close eye on it. BUY