In December 2018, Cardlytics, Inc. (NASDAQ:CDLX) released its most recent earnings announcement, which revealed that losses became smaller relative to the prior year’s level as a result of recent tailwinds Below, I’ve laid out key numbers on how market analysts perceive Cardlytics’s earnings growth outlook over the next few years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Market analysts’ prospects for the upcoming year seems relatively subdued, with earnings continuing to flop around in the negative territory, reaching -US$48.0m in 2020. Additionally, earnings are expected to fall further in the following year, decreasing to -US$35.0m in 2021 and -US$18.0m in 2022.
Although it’s helpful to understand the rate of growth each year relative to today’s level, it may be more insightful gauging the rate at which the earnings are growing every year, on average. The benefit of this approach is that we can get a bigger picture of the direction of Cardlytics’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 47%. This means that, we can expect Cardlytics will grow its earnings by 47% every year for the next few years.
For Cardlytics, I’ve put together three essential factors you should look at:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Future Earnings: How does CDLX’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CDLX? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.