Mattersight (NASDAQ:MATR) and Cardlytics (CDLX) Critical Analysis

Cardlytics (NASDAQ: CDLX) and Mattersight (NASDAQ:MATR) are both small-cap business services companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, earnings, valuation, risk, dividends, analyst recommendations and institutional ownership.

Insider and Institutional Ownership

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43.1% of Mattersight shares are held by institutional investors. 28.4% of Mattersight shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations for Cardlytics and Mattersight, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cardlytics 0 1 4 0 2.80
Mattersight 0 1 0 0 2.00

Cardlytics presently has a consensus target price of $22.40, suggesting a potential upside of 53.64%. Mattersight has a consensus target price of $2.75, suggesting a potential upside of 27.91%. Given Cardlytics’ stronger consensus rating and higher probable upside, equities analysts plainly believe Cardlytics is more favorable than Mattersight.

Profitability

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

Net Margins Return on Equity Return on Assets
Cardlytics N/A N/A N/A
Mattersight -35.09% N/A -31.41%

Earnings & Valuation

This table compares Cardlytics and Mattersight’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cardlytics $130.37 million 2.24 -$19.64 million ($8.02) -1.82
Mattersight $46.51 million 1.54 -$16.32 million ($0.49) -4.39

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

Summary

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

About Cardlytics

Cardlytics, Inc. is engaged in developing a purchase intelligence platform. The Company delivers relevant and measurable marketing analysis with purchase data from over financial institutions. The purchase data includes debit, credit, and bill pay data from online and in-store transactions. It helps the marketers identify, reach and influence likely buyers at scale, and measure the impact of marketing spends. The Company also operates an advertising channel, Cardlytics Direct. Cardlytics Direct delivers tailored marketing for marketers and financial institutions (FI). It provides personalized offers and suggestions for FI consumers on their purchase.

About Mattersight

Mattersight Corporation provides behavioral analytics services in the United States. The company provides predictive behavioral routing and workstyle, performance management, quality assurance, predictive analytics, and marketing managed services that analyzes and predicts customer behavior based on the language exchanged between agents and customers during brand interactions to enhance customer satisfaction and retention, employee engagement, and operating efficiency. It serves companies in the healthcare, insurance, financial service, technology, telecommunication, cable, utility, education, hospitality, and government industries. The company was formerly known as eLoyalty Corporation and changed its name to Mattersight Corporation in May 2011. Mattersight Corporation was founded in 1994 and is headquartered in Chicago, Illinois.

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