Atlanta-headquartered Cardlytics (CDLX) is a digital advertising platform. It partners with banks to run their loyalty programs and uses its insights into consumer spending to help marketers influence potential customers.
Let’s take a look at the company’s latest financial performance, corporate developments, and newly added risk factors. (See Cardlytics stock charts on TipRanks).
Q2 Financial Results and Q3 Guidance
The company reported a 109% year-over-year increase in revenue to $58.9 million for Q2 2021. Although revenue missed the consensus estimate of $62.81 million, it fell within Cardlytics’ guidance range of $58 million to $65 million.
The company posted an adjusted loss per share of $0.39, which met the consensus estimate but compared unfavorably to the adjusted loss per share of $0.38 in the same quarter last year. Cardlytics ended Q2 with $250.71 million in cash.
For Q3, the company anticipates revenue in the range of $57 million to $66 million.
Corporate Developments
The company is progressing with the integration of Dosh and Bridg, the two businesses it recently acquired. Dosh is a transaction-based advertising platform whose solutions are used by financial service providers, such as Venmo and Betterment. Cardlytics bought Dosh for $275 million in cash and stock to enhance its digital advertising offering.
Bridg provides data-driven solutions to help retailers and other businesses with their marketing efforts. For example, they can use Bridg’s platform to analyze customer behavior and measure how effective their business strategies are. Notably, Cardlytics acquired Bridg for $350 million in cash.
Risk Factors
The new TipRanks Risk Factors tool shows 63 risk factors for Cardlytics. Since Q4 2020, the company has updated its risk profile with three new risk factors.
Cardlytics tells investors that accounting for its Dosh and Bridg assets will be subject to certain assumptions. It cautions that under certain circumstances, there may be material charges to earnings that would, in turn, adversely affect its financial results.
The company tells investors that the Dosh app enables consumers to accumulate rewards. It warns that the way federal and state regulators decide to treat Dosh rewards could expose it to large liability and increase its compliance costs. The company further added that failure to comply with additional regulations related to Dosh rewards could expose it to penalties and adversely affect its business operations.
Cardlytics cautions investors that a cyberattack on its system could have a significant adverse impact on its business. It says that it is subject to stringent data privacy and security laws. It tells investors that a breach of its system or that of its partners could result in a huge expense, expose it to fines, and harm its reputation.
The majority of Cardlytics’ risk factors fall under the Finance and Corporate category, with 43% of the total risks. That is above the sector average of 38%. Cardlytics stock has declined about 32% year-to-date.
Analysts’ Take
In August, Needham analyst Kyle Peterson reaffirmed a Buy rating on Cardlytics stock with a price target of $120.
Consensus among analysts is a Strong Buy based on 3 unanimous Buys. The average Cardlytics price target of $120 implies 24.28% upside potential to current levels.
Related News:
What Does Hasbro’s Newly Added Risk Factor Tell Investors?
What Do Welbilt’s Risk Factors Reveal Amid Pending Merger?
RBC Launches New Features for Clients
