Why Cardlytics Stock Is Racing Higher After Earnings

Cardlytics, Inc. CDLX shares are trading higher Friday after the company posted better-than-expected fourth-quarter financial results and issued first-quarter revenue guidance above estimates.

The Details:

The company reported quarterly earnings of 14 cents per share which beat the analyst consensus estimate of 12 cents. 

Quarterly sales came in at $89.167 million, just missing the analyst consensus estimate of $89.551 million, and representing a 8.08% increase over the same period last year.

“The fourth quarter capped a transformational year for Cardlytics,” said Karim Temsamani, CEO of Cardlytics. “With our cost structure rebalanced, we can now focus on building a best-in-class platform with top-tier targeting and a differentiated user experience that will help deliver the best outcomes for our partners, their customers and our advertisers.”

Cardlytics sees first-quarter revenue of between $70 million and $73 million, above the $66.46 million estimate. 

Needham analyst Kyle Peterson maintained Cardlytics with a Buy rating and raised the price target from $12 to $15 following the print. 

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CDLX Stock Prediction 2024:

Equity research analysts on and off Wall Street typically use earnings growth and fundamental research as a form of valuation and forecasting. But many in trading turn to technical analysis as a way to form predictive models for share price trajectory.

Some investors look to trends to help forecast where they believe a stock could trade at a certain point in the future. Looking at Cardlytics, an investor could make an assessment about a stock's long term prospects using a moving average and trend line. If they believe a stock will remain above the moving average, which many believe is a bullish signal, they can extrapolate that trend into the future using a trend line. For Cardlytics, the 200-day moving average sits at $9.82, according to Benzinga Pro, which is below the current price of $12.71. For more on charts and trend lines, see a description here.

Traders believe that when a stock is above its moving average, it is a generally bullish signal, and when it crosses below, it is a more negative signal. Investors could use trend lines to make an educated guess about where a stock could trade at a later date if conditions remain stable.

CDLX Price Action: According to Benzinga Pro, Cardlytics shares are up 50.3% at $12.30 at the time of publication.

Image: Pete Linforth from Pixabay