Reviewing Cardlytics (NASDAQ:CDLX) & Locafy (NASDAQ:LCFY)

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

Risk and Volatility

Locafy has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500. Comparatively, Cardlytics has a beta of 1.65, suggesting that its share price is 65% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Locafy	-66.21%	-82.35%	-45.02%
Cardlytics	-50.21%	-17.96%	-5.97%

Earnings and Valuation

This table compares Locafy and Cardlytics’ top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Locafy	$4.21 million	1.78	-$2.62 million	($1.87)	-3.15
Cardlytics	$305.42 million	0.55	-$134.70 million	($4.42)	-0.78

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

Analyst Ratings

This is a breakdown of current ratings and price targets for Locafy and Cardlytics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Locafy	0	0	0	0	N/A
Cardlytics	1	5	0	0	1.83

Cardlytics has a consensus target price of $7.50, indicating a potential upside of 118.66%. Given Cardlytics’ higher probable upside, analysts clearly believe Cardlytics is more favorable than Locafy.

Insider and Institutional Ownership

0.0% of Locafy shares are owned by institutional investors. Comparatively, 68.1% of Cardlytics shares are owned by institutional investors. 28.7% of Locafy shares are owned by company insiders. Comparatively, 4.4% of Cardlytics shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Cardlytics beats Locafy on 8 of the 12 factors compared between the two stocks.

About Locafy

Locafy Limited operates as a software-as-a-service company (SaaS) that specializes in search engine marketing in Australia, New Zealand, Europe, North America, and internationally. The company operates in three segments: Publishing, Direct Sales, and Reseller Sales. It focuses on commercializing its SaaS online publishing technology platform that comprises an integrated suite of solutions. The company also owns and operates several online directories and offers search engine optimization solutions, which include creation of proximity pages and proximity networks, local pages, and map pack booster. In addition, its platform publishes content to various devices that uses a web browser to display web content, as well as programmatically optimizes the published content for local search. The company offers its solutions directly to customers, as well as through digital agencies and search engine optimization freelancers. The company was formerly known as Moboom Limited and changed its name to Locafy Limited in January 2021. Locafy Limited was incorporated in 2009 and is based in Subiaco, Australia.

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.