Contrasting Cardlytics (NASDAQ:CDLX) and Magnite (NASDAQ:MGNI)

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

Risk & Volatility

Magnite has a beta of 2.33, indicating that its stock price is 133% more volatile than the S&P 500. Comparatively, Cardlytics has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500.

Earnings & Valuation

This table compares Magnite and Cardlytics”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Magnite	$742.04 million	4.22	$144.61 million	$1.09	20.02
Cardlytics	$190.00 million	0.05	-$103.49 million	($18.48)	-0.09

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Magnite	22.49%	9.33%	2.77%
Cardlytics	-55.92%	-956.56%	-38.39%

Insider and Institutional Ownership

73.4% of Magnite shares are owned by institutional investors. Comparatively, 68.1% of Cardlytics shares are owned by institutional investors. 3.2% of Magnite shares are owned by company insiders. Comparatively, 5.9% of Cardlytics shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Magnite	0	1	11	0	2.92
Cardlytics	2	1	0	0	1.33

Magnite presently has a consensus price target of $29.36, suggesting a potential upside of 34.57%. Cardlytics has a consensus price target of $10.00, suggesting a potential upside of 495.24%. Given Cardlytics’ higher possible upside, analysts clearly believe Cardlytics is more favorable than Magnite.

Summary

Magnite beats Cardlytics on 12 of the 14 factors compared between the two stocks.

About Magnite

Magnite, Inc., together with its subsidiaries, operates an independent omni-channel sell-side advertising platform in the United States and internationally. The company’s platform offers applications and services for sellers of digital advertising inventory or publishers that own and operate CTV channels, applications, websites, and other digital media properties to manage and monetize their inventory; and applications and services for buyers, including advertisers, agencies, agency trading desks, and demand side platforms to buy digital advertising inventory, as well as an independent marketplace that connects buyers and sellers. It markets its solutions through sales teams that operate from various locations. The company was formerly known as The Rubicon Project, Inc. and changed name to Magnite, Inc. in July 2020. Magnite, Inc. was incorporated in 2007 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.