Critical Survey: Criteo (NASDAQ:CRTO) & Cardlytics (NASDAQ:CDLX)

Criteo (NASDAQ:CRTO) and Cardlytics (NASDAQ:CDLX) are both small-cap communication services companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, dividends, earnings, institutional ownership and analyst recommendations.

Institutional & Insider Ownership

94.3% of Criteo shares are held by institutional investors. Comparatively, 68.1% of Cardlytics shares are held by institutional investors. 1.5% of Criteo shares are held by insiders. Comparatively, 5.9% of Cardlytics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Criteo and Cardlytics”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Criteo	$1.94 billion	0.37	$144.60 million	$1.97	7.51
Cardlytics	$190.00 million	0.08	-$103.49 million	($18.48)	-0.14

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

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Criteo	3	3	6	0	2.25
Cardlytics	2	1	0	0	1.33

Criteo presently has a consensus target price of $22.65, suggesting a potential upside of 53.03%. Cardlytics has a consensus target price of $10.00, suggesting a potential upside of 285.36%. Given Cardlytics’ higher possible upside, analysts plainly believe Cardlytics is more favorable than Criteo.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Criteo	5.60%	14.33%	8.05%
Cardlytics	-55.92%	-956.56%	-38.39%

Risk and Volatility

Criteo has a beta of 0.29, meaning that its stock price is 71% less volatile than the S&P 500. Comparatively, Cardlytics has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500.

Summary

Criteo beats Cardlytics on 11 of the 14 factors compared between the two stocks.

About Criteo

Criteo S.A., a technology company, provides marketing and monetization services on the open Internet in North and South America, Europe, the Middle East, Africa, and the Asia-Pacific. The company's Criteo Shopper Graph, which derives clients' proprietary commerce data, such as transaction activity on their digital properties. It also offers Criteo AI Engine solutions, including lookalike finder, recommendation, and predictive bidding algorithms; recommendation algorithms, dynamic creative optimization+, sponsored product placement algorithms, and other product placement algorithms. The company's technology comprises data synchronization, storage, and analysis of distributed computing infrastructure in various geographies, as well as fast data collection and retrieval using multi-layered caching infrastructure; and experimentation platform, an offline/online testing platform to enhance the capabilities and effectiveness of prediction models. In addition, it provides Criteo Marketing Solutions that allow commerce companies to address various marketing goals by engaging their consumers with personalized ads across the web, mobile, and offline store environments; and Criteo Retail Media solutions, which allows retailers to generate advertising revenues from consumer brands, and/or to drive sales for themselves, by monetizing their data and audiences through personalized ads, either on their own digital property or on the open Internet. Further, the company offers real-time advertising technology and trading infrastructure, delivering advanced media buying, selling, and packaging capabilities for media owners, agencies, performance advertisers, and third-party AdTech platforms. It serves companies in digital retail, travel, and classifieds sectors. Criteo S.A. was incorporated in 2005 and is headquartered in Paris, France.

About Cardlytics

Cardlytics, Inc. operates an advertising platform in the United States and the United Kingdom. It offers Cardlytics platform, a proprietary native bank advertising channel that enables marketers to reach customers through their network of financial institution partners through digital channels, such as online, mobile applications, email, and various real-time notifications; and Bridg platform, a customer data platform which utilizes point-of-sale data and enables marketers to perform analytics and targeted loyalty marketing, as well as measure the impact of their marketing. The company was incorporated in 2008 and is headquartered in Atlanta, Georgia.