When it comes to Cardlytics, the debt picture paints a challenging scenario. The company carries a substantial total debt load of around $221.7 million, with long-term debt making up most of this at approximately $167.7 million. Despite holding $65.6 million in cash and short-term investments, the cash flow remains under pressure, with a recent period showing a cash outflow of about $26.2 million. The company’s negative EBITDA of roughly $152.5 million and net income of nearly $189.3 million highlight ongoing profitability struggles, which could complicate efforts to manage or refinance its debt. With current assets and cash flows not fully covering its debt obligations, Cardlytics’ leverage remains a key concern for investors, especially as it navigates a tough advertising environment and industry headwinds. Cardlytics is set to release its earnings today. Currently, its shareholders' equity per share remains relatively steady compared to the past year. The debt-to-equity ratio is expected to climb to around 3.33 by 2025, while the market capitalization may dip slightly above $287 million. Despite some concerns among baby boomers about the media landscape, Cardlytics still presents a viable option for investors looking for exposure in the digital advertising space. Its stability in key financial metrics suggests it’s worth keeping an eye on, especially as the company navigates a changing market environment.
Cardlytics financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Cardlytics, including all of Cardlytics's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Cardlytics assets, the company is considered highly leveraged. Understanding the
composition and structure of overall Cardlytics debt and outstanding corporate bonds gives a good idea of
how risky the capital structure of a business is and if it is worth investing in it. Please read more on our
technical analysis page.
Watch out for price decline
Please consider monitoring Cardlytics on a daily basis if you are holding a position in it. Cardlytics is trading at a penny-stock level, and the possibility of delisting is much higher compared to other stocks. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion.
Most exchanges require public instruments, such as Cardlytics stock to be traded above the $1 level to remain listed. If Cardlytics stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.
How important is Cardlytics's Liquidity
Cardlytics
financial leverage refers to using borrowed capital as a funding source to finance Cardlytics ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Cardlytics financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Cardlytics' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Cardlytics' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Cardlytics's total debt and its cash.
An Additional Perspective On Cardlytics
Cardlytics reported the previous year's revenue of 278.3
M. Net Loss for the year was (189.3
M) with profit before overhead, payroll, taxes, and interest of 115.71
M.
Liabilities Breakdown
138.3 M
Total Current Liabilities
205 M
Non Current Liabilities Total
| Total Current Liabilities | 138.27 Million |
| Liabilities And Stockholders Equity | 439.16 Million |
| Non Current Liabilities Total | 204.99 Million |
| Non Current Liabilities Other | 3.56 Million |
Warren Buffett once said, "The stock market is a device for transferring money from the impatient to the patient." Looking at Cardlytics, its December debt outlook shows a total debt of approximately 221.65 million, with long-term debt at 167.7 million and net debt around 156.1 million.
The company's high risk profile is reflected in a probability of bankruptcy at 88.39%, driven by significant operating losses of 195.5 million and negative income before tax of 189.3 million. Despite a market cap of just over 101 million, its leverage ratios and negative return on assets (-0.08) suggest caution, especially considering the company's heavy intangible assets and ongoing expenses. Investors should weigh the potential upside of 20.47% against the mounting debt and operational challenges facing Cardlytics..
Will Cardlytics slide impact its fundamentals?
The recent spike in Cardlytics' volatility, soaring past 209.53, raises questions about its stability and what it might mean for the company's outlook. Such a sharp jump hints at increased uncertainty and shifting investor sentiment. While this doesn’t necessarily signal trouble, it’s a sign to dig deeper into whether the company’s fundamentals can handle these swings or if risks are mounting. Investors should stay cautious and analyze what's driving this volatility before making any moves. Cardlytics is showing above-average fluctuations over this period, and understanding these trends can help in timing entries and exits.
During downturns, heightened volatility can put pressure on the stock, prompting investors to rebalance their portfolios as share prices fluctuate.Investing in Cardlytics right now comes with a fair share of uncertainty. The stock's valuation hovers around a market value of approximately
1.9, with some analysts seeing a potential upside to around
17.31 if things turn favorable. However, the overall consensus remains cautious, with most analysts holding a "Hold" rating and a naive expected forecast value of about 2.54. Given the current data, there's a significant risk of downside, especially considering the possible downside price is estimated at just 0.019. For those considering a position, it’s crucial to weigh the potential for gains against the considerable volatility and the company's ongoing challenges..
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Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Cardlytics. Please refer to our
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