Cardlytics (Cardlytics) Predictability Rank

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What is Cardlytics Predictability Rank?

Not Rated

Warren Buffett said many times that the companies he likes are:

1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.

It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.

GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.

Cardlytics Predictability Rank Calculation

In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.

Our study may be subject to these biases and assumptions:

Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.

The correlation between business predictability and investment returns of a company is showed below.

Correlation Between Business Predictability and Investment Returns

	Predictables	Non-Predictable	All stocks
Total Number of stocks	570	1833	2403
Total Lost Money	61	830	891
Total Lost More Than 50%	18	412	430
Total Lost More Than 90%	4	86	90
Average Gain	260.6%	100.0%	138.1%
Median Gain	150.0%	13.0%	39.0%
Maximum Gain	2852.0%	11483.0%	11483.0%
Maximum Loss	-100.0%	-100.0%	-100.0%
Annualized Average Gain	12.7%	6.7%	8.4%
Annualized Median Gain	8.9%	1.1%	3.1%

For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.

Predictability Rank	5-Star	4.5-Star	4-Star	3.5-Star	3-Star	2.5-Star	2-Star	1-Star (non-predictable)	Average among all
% Out of All 2403 Stocks	3.3%	2.9%	3.7%	3.3%	3.3%	3.7%	3.3%	76.3%	100%
% that are in Loss (10y)	3%	10%	8%	9%	11%	18%	16%	45%	37%
Average Gain (10y)	364.6%	330.9%	278.0%	235.1%	243.5%	227.8%	154.8%	100.0%	138.1%
Median Gain (10y)	238.5%	193.5%	171.0%	159.0%	132.5%	113.5%	87.0%	13.0%	39.0%
Maximum Gainer	2228.0%	2547.0%	2452.0%	2852.0%	2432.0%	1892.0%	1807.0%	11483.0%	11483.0%
Maximum Loser	-82.0%	-53.0%	-67.0%	-100.0%	-83.0%	-100.0%	-78.0%	-100.0%	-100.0%
Annualized Average Gain	15.4%	14.6%	13.2%	12.0%	12.2%	11.7%	9.1%	6.7%	8.4%
Annualized Median Gain	12.1%	10.6%	9.8%	9.3%	8.2%	7.3%	6.0%	1.1%	3.1%

For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank

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Cardlytics (Cardlytics) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Media - Diversified » Cardlytics Inc (NAS:CDLX) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

CYX:Germany

Address

675 Ponce de Leon Avenue NE, Suite 6000, Atlanta, GA, USA, 30308

Website

https://www.cardlytics.com

Cardlytics Inc operates an advertising platform within financial institutions' digital channels, which include online, mobile, email, and various real-time notifications. The company operates through three segments, Cardlytics Direct U.S. and U.K., and the Bridg platform. The Cardlytics Direct segment which generates the majority of revenue operates a proprietary native bank advertising channel that enables marketers to reach consumers through their trusted and frequently visited online and mobile banking channels. The Bridg platform generates revenue through the sale of subscriptions to the cloud-based customer-data platform and the delivery of professional services like implementation, onboarding, and technical support. The company receives maximum revenue from the United States.

Executives

Clifford Sosin	10 percent owner	8 WRIGHT STREET, 1ST FL, WESTPORT CT 06880
Karim Saad Temsamani	director, officer: Chief Executive Officer	C/O CARDLYTICS, INC., 675 PONCE DE LEON AVENUE NE, SUITE 6000, ATLANTA GA 30308
Nicholas Hollmeyer Lynton	officer: Chief Legal & Privacy Officer	C/O CARDLYTICS, INC., 675 PONCE DE LEON AVENUE NE, SUITE 6000, ATLANTA GA 30308
Alex Mishurov	director	C/O CARDLYTICS, INC., 675 PONCE DE LEON AVE. NE, SUITE 6000, ATLANTA GA 30308
Scott A Hill	director	INTERCONTINENTALEXCHANGE, INC., 2100 RIVEREDGE PKWY. STE. 500, ATLANTA GA 30328
Alexis Desieno	officer: Chief Financial Officer	C/O CARDLYTICS, INC., 675 PONCE DE LEON AVENUE NE, SUITE 6000, ATLANTA GA 30308
Andrew Christiansen	officer: Chief Financial Officer	C/O CARDLYTICS, INC., 675 PONCE DE LEON AVENUE NE, SUITE 6000, ATLANTA GA 30308
Chris Suh	director	C/O CARDLYTICS, INC., 675 PONCE DE LEON AVE. NE, STE 6000, ATLANTA GA 30308
Jessica Jensen	director	C/O CARDLYTICS, INC., 675 PONCE DE LEON AVENUE NE, SUITE 6000, ATLANTA GA 30308
Amit Gupta	officer: Chief Operating Officer	C/O CARDLYTICS, INC, 675 PONCE DE LEON AVENUE NE, SUITE 6000, ATLANTA GA 30308
John V Balen	director
Scott D. Grimes	director, officer: Chief Executive Officer	CARDLYTICS, INC., 675 PONCE DE LEON AVENUE NE, SUITE 6000, ATLANTA GA 30308
Lynne Marie Laube	director, officer: Chief Operating Officer	C/O CARDLYTICS, INC., 675 PONCE DE LEON AVENUE NE, SUITE 6000, ATLANTA GA 30308
Kirk Somers	officer: Chief Legal & Privacy Officer
S Aimee Lapic	director	2101 WEBSTER ST #1650, OAKLAND CA 94612