Yahoo Finance Analysts Have Been Trimming Their Cardlytics, Inc. (NASDAQ:CDLX) Price Target After Its Latest Report
Shareholders in Cardlytics, Inc. (NASDAQ:CDLX) had a terrible week, as shares crashed 47% to US$3.78 in the week since its latest quarterly results. Revenues of US$70m came in a modest 7.6% below forecasts. Statutory losses were a relative bright spot though, with a per-share loss of US$0.09 coming in a substantial 80% smaller than what the analysts had expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for Cardlytics
Taking into account the latest results, the current consensus, from the four analysts covering Cardlytics, is for revenues of US$282.8m in 2024. This implies a measurable 7.4% reduction in Cardlytics' revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 52% to US$1.49. Before this latest report, the consensus had been expecting revenues of US$318.8m and US$1.70 per share in losses. We can see there's definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to next year's revenue estimates, while at the same time reducing their loss estimates.
The consensus price target fell 24% to US$10.25, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Cardlytics analyst has a price target of US$18.00 per share, while the most pessimistic values it at US$7.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 14% annualised decline to the end of 2024. That is a notable change from historical growth of 12% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.2% annually for the foreseeable future. It's pretty clear that Cardlytics' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Cardlytics analysts - going out to 2025, and you can see them free on our platform here.
Plus, you should also learn about the 3 warning signs we've spotted with Cardlytics (including 1 which can't be ignored) .
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
