Cardlytics vs Mr Market: Are The Odds Really That Low?
Bad 2024, good earnings call, progress on many fronts. But is it enough to overcome a liquidity issue in 2025?
I need a dollar dollar, a dollar is what I need
Hey, hey
Well I need a dollar dollar, a dollar that's what I need
Hey, hey
Said I need dollar dollar, a dollar is what I need
And if I share with you my story would you share your dollar with me?
Source: I Need a Dollar, Aloe Blacc
Introduction
Cardlytics reported 2024 earnings last week. It is a tale of two stories… The stock is down significantly from my initial post in November (- but had a relief rally after this earnings report as it beat the company’s guidance. The company is currently a micro-cap - amazing considering it is down ~90% during the last year:
For context, my ealier posts:
Outline
TL;DR
Equity Summary
The Earnings
My Take & Conclusion
TL;DR
Cash might be getting tight this year. Last quarter was almost cash break-even, but seasonality may be a part of it here.
They are cutting costs but continue to invest in software capabilities
Positive earnings call, operational improvements, potential to expand in other verticals. A new FI partner was signed. The American Express roll-out is complete and now ramping.
Based on an earlier steady state valuation scenario of mine it seems the current market capitalization expresses virtually no chance for the company to make it to cash positivity and actually reaching a $600M revenue scenario: the implied odds seem to be as low as 3.4% (or my OPEX model or the WACC are wrong).