Reviewing Facebook (FB) and Cardlytics (CDLX)

Facebook (NASDAQ:FB) and Cardlytics (NASDAQ:CDLX) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, dividends and risk.

Profitability

This table compares Facebook and Cardlytics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Facebook 39.31% 28.16% 24.86%
Cardlytics N/A N/A N/A

Valuation and Earnings

This table compares Facebook and Cardlytics’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Facebook $40.65 billion 12.07 $15.93 billion $6.16 27.41
Cardlytics $130.37 million 3.85 -$19.64 million ($8.02) -3.09

Facebook has higher revenue and earnings than Cardlytics. Cardlytics is trading at a lower price-to-earnings ratio than Facebook, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

60.4% of Facebook shares are owned by institutional investors. Comparatively, 49.7% of Cardlytics shares are owned by institutional investors. 17.2% of Facebook shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Facebook and Cardlytics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Facebook 2 6 38 0 2.78
Cardlytics 0 1 5 0 2.83

Facebook currently has a consensus target price of $205.95, indicating a potential upside of 21.98%. Cardlytics has a consensus target price of $24.40, indicating a potential downside of 1.49%. Given Facebook’s higher possible upside, equities research analysts plainly believe Facebook is more favorable than Cardlytics.

Summary

Facebook beats Cardlytics on 12 of the 13 factors compared between the two stocks.

Facebook Company Profile

Facebook, Inc. provides various products to connect and share through mobile devices, personal computers, and other surfaces worldwide. Its products include Facebook Website and mobile application that enables people to connect, share, discover, and communicate with each other on mobile devices and personal computers; Instagram, a community for sharing visual stories through photos, videos, and direct messages; Messenger, a messaging application to communicate with other people, groups, and businesses across various platforms and devices; and WhatsApp, a mobile messaging application. The company also offers Oculus virtual reality technology and content platform, which allows people to enter an immersive and an interactive environment to train, learn, play games, consume content, and connect with others. As of December 31, 2017, it had approximately 1.40 billion daily active users. Facebook, Inc. was founded in 2004 and is headquartered in Menlo Park, California.

Cardlytics Company Profile

Cardlytics, Inc. operates a purchase intelligence platform in the United States and the United Kingdom. It operates in two segments, Cardlytics Direct and Other Platform Solutions. The company's platform is the Cardlytics Direct solution, a proprietary native bank advertising channel that enables marketers to reach consumers through their trusted and frequently visited online and mobile banking channels. It also provides solutions that enable marketers and marketing service providers to leverage the power of purchase intelligence outside the banking channel. The company was founded in 2008 and is headquartered in Atlanta, Georgia.

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