Market Overview

BofA Takes Neutral Stance On Cardlytics, Cites Scaling Concerns

Share:
BofA Takes Neutral Stance On Cardlytics, Cites Scaling Concerns
Related
55 Biggest Movers From Friday
48 Stocks Moving In Friday's Mid-Day Session

A Bank of America Merrill Lynch analyst is taking a cautious stance on newly public Cardlytics Inc (NASDAQ: CDLX).

The Analyst 

BofA's Nat Schindler initiated coverage of Cardlytics with a Neutral rating and $19 price target.

The Thesis

Cardlytics has a major growth opportunity to monetize the users of banking apps and websites, Schindler said in a Tuesday note.

The analyst said he is cautious about client concentration, pricing leverage and scaling.

Over 1,600 consumers surveyed suggested positive indicators for consumer interest, penetration and churn of the Cardlytics platform, the analyst said, citing a proprietary BofA survey. The company is monetizing its new, valuable advertising "real estate," Schindler said, but faces obstacles in the scaling of the business. 

Wells Fargo & Co (NYSE: WFC)'s full launch of the Cardlytics platform, scheduled for 2019, could drive 39 percent year-over-year revenue growth, a significant re-acceleration and diversification of Cardlytic's user base, according to BofA. 

"However, there could be downside if there are any delays or cancellation of the program," Schindler said. 

Although the bull-case long-term EBITDA margin of 25 percent is possible for Cardlytics, a 15-20 percent rate is more likely, the analyst said. 

The Price Action

Cardlytics shares are up about 26 percent since its Feb. 9 IPO.

The shares were up 1.96 percent at $17.13 at the time of publication midday Tuesday. 

Related Links:

7 Big Companies That Could Tap The IPO Markets In 2018

Morgan Stanley Says Hudson Ltd Catalysts Remain Elusive

Latest Ratings for CDLX

DateFirmActionFromTo
Nov 2018Raymond JamesMaintainsOutperformOutperform
Nov 2018JP MorganMaintainsOverweightOverweight
Nov 2018Morgan StanleyMaintainsOverweightOverweight

View More Analyst Ratings for CDLX
View the Latest Analyst Ratings

Posted-In: Bank of America Merrill Lynch Nat SchindlerAnalyst Color Price Target Initiation Analyst Ratings Best of Benzinga

 

Related Articles (WFC + CDLX)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
DLTRBernsteinUpgrades0.0
CNPUBSUpgrades34.0
UGIUBSDowngrades63.0
ATOUBSDowngrades106.0
CSCONomuraDowngrades50.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

IRhythm Technologies Is Breaking Ground In Cardiac Monitoring, Says New Sell-Side Bull

38 Stocks Moving In Tuesday's Mid-Day Session