Critical Analysis: Nextdoor (NYSE:KIND) versus Cardlytics (NASDAQ:CDLX)

Nextdoor (NYSE:KIND) and Cardlytics (NASDAQ:CDLX) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, institutional ownership, risk, analyst recommendations and profitability.

Valuation & Earnings

This table compares Nextdoor and Cardlytics’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nextdoor	$218.31 million	3.62	-$147.76 million	($0.38)	-5.29
Cardlytics	$309.20 million	1.96	-$134.70 million	($3.46)	-3.64

Cardlytics has higher revenue and earnings than Nextdoor. Nextdoor 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

35.7% of Nextdoor shares are held by institutional investors. Comparatively, 68.1% of Cardlytics shares are held by institutional investors. 47.6% of Nextdoor shares are held by company insiders. Comparatively, 4.4% of Cardlytics shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Nextdoor has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, Cardlytics has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Nextdoor	-67.69%	-24.22%	-20.71%
Cardlytics	-43.56%	-25.38%	-8.32%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Nextdoor and Cardlytics, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nextdoor	0	4	0	0	2.00
Cardlytics	0	1	3	0	2.75

Nextdoor currently has a consensus price target of $2.85, suggesting a potential upside of 41.79%. Cardlytics has a consensus price target of $15.50, suggesting a potential upside of 23.21%. Given Nextdoor’s higher probable upside, analysts plainly believe Nextdoor is more favorable than Cardlytics.

Summary

Cardlytics beats Nextdoor on 9 of the 14 factors compared between the two stocks.

About Nextdoor

Nextdoor Holdings, Inc. operates a neighborhood network that connects neighbors, businesses, and public services in the United States and internationally. The company enables neighbors and organizations to get information, give and get help, and build connections. It also offers advertising solutions, designs to generate value for businesses for connection and sales expansion. The company is headquartered in San Francisco, California.

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.