Cardlytics ($CDLX): "1,000 Bagger" Valuation Scenarios (Update #177)
Includes two 1,000 bagger scenarios + complete numbers and supporting information for the bearish/base/bullish valuation scenarios discussed on my interview on the After Dinner Investor podcast.
Market Cap as of 5.23.2023: ~$5.78 / Share x 33.9M Shares ~ $196M Market Cap.
Last week I spoke with Jason Rothman from the After Dinner Investor podcast about Cardlytics, on the episode, “Will Cardlytics Be a 1,000 Bagger?”.
In that interview, we discussed multiple possible valuation scenarios.
Given we covered that section quite quickly, I wanted to provide some additional information that may be helpful (all included at the bottom of this post), as well as additional scenarios (including two 1,000 bagger scenarios).
Therefore, at the end of this post in CDLX Research Notes update #177, I discuss:
Bearish / Base / Bullish Scenarios
While I walked through these on the podcast, I wanted to lay out all the numbers and related information.
I also wanted to include the full valuations on the more bullish scenarios (where in the interview I only provided the revenue).
Related to this, I wanted to discuss possible new banks and the reasons they could join, leading to higher MAUs.
Also included valuations if a major bank left.
There is also a potential margin of safety that is highlighted.
1,000 Bagger Scenarios
In the podcast I mentioned different factors that could get CDLX there, but I did not discuss the actual numbers.
Therefore, I added what would need to happen in terms of numbers, and why it is possible.
I included two different ways this could occur.
Also included a discussion of the runway.
Supporting Information
Details on ARPU, MAUs, FI Revenue Share, OpEx & Delivery Costs, Taxes and NOLs, Multiples, 2025 Convertible Senior Notes (Converts), Line of Credit (LOC), Share Count and Dilution.
To provide the most value possible, I included quite a bit of detail in update #177 below.
The CDLX Research Notes Updates
At this time, all of the following notes are under:
For convenience, I copied over the corresponding sections of the Research Notes and pasted them at the end of this post.
CDLX Research Notes: Update #177
Added on 5.23.2023
"1,000 Bagger" Valuation Scenarios
Bearish / Base / Bullish Scenarios (Complete Numbers and Detail)
1,000 Bagger Scenarios
Supporting Information
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Cardlytics ($CDLX) Research Notes:
For all of you with a paid subscription, you can read some of the recent updates:
#174-176 (5.11.2023): Thoughts After Q1 2023 Earnings
#172-173 (5.4.2023): New & Improved Feature, Final Thoughts Before Today's Earnings Call
#171 (5.1.2023): First Thoughts on Bridg Dispute Outcome
#170 (4.27.2023): Updated VWAP Projections + Additional Bridg Earnout Payment Possibility
#166-169 (4.25.2023): Updated Bridg VWAP Projections, Thoughts on Timing of Earnings and the Bridg Resolution
#164-165 (4.19.2023): Bridg VWAP Projections (12 and 13 trading days remaining of 20)
#162-163 (4.12.2023): Potential Stock Price After the Bridg Resolution, Potential Bridg Clients
160-161 (4.7.2023): Timing of Announcements, Convertible Senior Notes, Updated Projections
#158-159 (4.4.2023): Updated Guidance + Updated Liquidity Analysis and Projections
#156-157 (4.3.2023): Potential for New Banks Signing Soon and/or Remaining Banks Moving to the New Ad Server Ahead of Schedule, Possibilities and Potential Impact of Images
#154-155 (3.30.2023): How Bridg Can Lower FI Revenue Share, My Latest Large Purchases of CDLX with Leverage
#150-153 (3.27.2023): Possible Upcoming Announcements that Could Increase the Stock Price, New User Experience on My Chase Account, Less-Considered Liquidity Resources
#145-149 (3.24.2023): PacWest Deposits and LOC, Bridg Dispute, Resignation of CFO
#140-144 (3.20.2023): Why I Bought More
#133-139 (3.12.2023): Liquidity Analysis, Prior Use of SVB, 22Q4 Earnings, and More
I have also added a page to keep track of these updates as well.
Carvana ($CVNA) Research Notes:
General Research Notes on Businesses, Investments, and CEOs (Historical to Current):
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For convenience, I copied over the corresponding sections of the Research Notes and pasted them directly below.
The Updates:
(#177) 5.23.2023: "1,000 Bagger" Valuation Scenarios
In my interview on the After Dinner Investor podcast, I walked through a few potential valuation scenarios. I included those below but with significantly more detail than what was shared on the podcast (as you will see, there would not have been time to discuss all of this).
Given the name of the podcast episode was “Will Cardlytics Be a 1,000 Bagger?”, I thought it would also be appropriate to walk through how this could be possible.
To start, directly below is a summary table with all the numbers from the different scenarios that I will be discussing in detail in this update below (including a 1,000 bagger under two different possible scenarios).
As seen in the table below, it only takes small increases in the average revenue per user (ARPU) to produce cash flow that is significant in relation to today’s market cap, which would lead to very attractive returns (multiples of today’s market price). And then I believe there is quite a long of runway after that, leading to even higher potential returns (as I will in detail below).