Cardlytics, the Communication Services sector company, was revisited by a Wall Street analyst today. Analyst Omar Dessouky from Bank of America Securities reiterated a Sell rating on the stock and has a $1.50 price target.
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Omar Dessouky has given his Sell rating due to a combination of factors impacting Cardlytics’ financial outlook. The company’s third-quarter results were in line with expectations, but the ongoing transition away from reliance on Chase, its largest financial institution partner, poses significant challenges. This transition is expected to take several quarters, affecting the company’s ability to stabilize and grow its revenue streams.
Moreover, while management is taking steps to diversify partnerships and introduce new product features, the uncertainty surrounding the loss of Chase continues to cast doubt on the company’s growth prospects. The cautious guidance for the fourth quarter, typically a peak period, further underscores the difficulties in achieving a clear recovery path. Despite efforts to manage costs and extend debt maturity, the lack of visible growth and a viable profit model makes Cardlytics a challenging investment within the AdTech sector.