Fluent (NASDAQ:FLNT) and Cardlytics (NASDAQ:CDLX) Critical Review

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Fluent	-11.48%	-134.07%	-29.97%
Cardlytics	-55.92%	-956.56%	-38.39%

Analyst Ratings

This is a summary of current recommendations and price targets for Fluent and Cardlytics, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fluent	0	1	1	0	2.50
Cardlytics	2	1	0	0	1.33

Fluent presently has a consensus target price of $5.00, suggesting a potential upside of 22.25%. Cardlytics has a consensus target price of $10.00, suggesting a potential upside of 136.41%. Given Cardlytics’ higher probable upside, analysts plainly believe Cardlytics is more favorable than Fluent.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fluent	$202.15 million	0.60	-$27.17 million	($0.77)	-5.31
Cardlytics	$233.27 million	0.11	-$103.49 million	($18.48)	-0.23

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

Institutional & Insider Ownership

23.3% of Fluent shares are owned by institutional investors. Comparatively, 68.1% of Cardlytics shares are owned by institutional investors. 38.4% of Fluent shares are owned by insiders. Comparatively, 5.9% of Cardlytics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility and Risk

Fluent has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, Cardlytics has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500.

Summary

Fluent beats Cardlytics on 10 of the 14 factors compared between the two stocks.

About Fluent

Fluent, Inc. provides data-driven digital marketing services in the United States and internationally. The company operates through Fluent and All Other segments. It offers customer acquisition services by operating digital marketing campaigns, through which the company connects its advertiser clients with consumers. The company also delivers data and performance-based marketing executions to various consumer brands, direct marketers, and agencies across a range of industries, including financial products and services, media and entertainment, health and life sciences, retail and consumer, and staffing and recruitment. Fluent, Inc. was founded in 2010 and is headquartered in New York, New York.

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.