Critical Review: Synacor (SYNC) vs. Cardlytics (CDLX)

Synacor (NASDAQ:SYNC) and Cardlytics (NASDAQ:CDLX) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, profitability, risk, dividends, institutional ownership and valuation.

Institutional and Insider Ownership

26.6% of Synacor shares are held by institutional investors. Comparatively, 49.8% of Cardlytics shares are held by institutional investors. 18.6% of Synacor shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Synacor and Cardlytics’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Synacor $140.03 million 0.49 -$9.77 million ($0.27) -6.56
Cardlytics $130.37 million 3.26 -$19.64 million ($8.02) -2.61

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

Analyst Recommendations

This is a breakdown of recent ratings for Synacor and Cardlytics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Synacor 0 1 0 0 2.00
Cardlytics 0 1 5 0 2.83

Synacor presently has a consensus target price of $5.00, indicating a potential upside of 182.49%. Cardlytics has a consensus target price of $24.40, indicating a potential upside of 16.41%. Given Synacor’s higher possible upside, analysts plainly believe Synacor is more favorable than Cardlytics.

Profitability

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

Net Margins Return on Equity Return on Assets
Synacor -3.18% -11.18% -6.10%
Cardlytics N/A N/A N/A

Summary

Cardlytics beats Synacor on 8 of the 13 factors compared between the two stocks.

About Synacor

Synacor, Inc. operates as a technology development, multiplatform services, and revenue partner for video, Internet, and communications providers; and device manufacturers, governments, and enterprises. It enables its customers to provide their consumers engaging, multiscreen experiences with products that require scale, and actionable data and implementation. The company, through its managed portals and advertising solutions, enables its customers to earn revenue by monetizing media among their consumers. It also offers recurring and fee-based revenue solutions, such as Cloud ID Authentication that offers home-based auto-authentication and social login, which enhances the consumer experience by reducing login failures; Email/Collaboration Services that include white-label hosting, security, and migration; and paid content and premium services. The company was formerly known as CKMP, Inc. and changed its name to Synacor, Inc. in July 2001. Synacor, Inc. was founded in 1998 and is headquartered in Buffalo, New York.

About Cardlytics

Cardlytics, Inc. operates a purchase intelligence platform in the United States and the United Kingdom. It operates in two segments, Cardlytics Direct and Other Platform Solutions. The company's platform is the Cardlytics Direct solution, a proprietary native bank advertising channel that enables marketers to reach consumers through their trusted and frequently visited online and mobile banking channels. It also provides solutions that enable marketers and marketing service providers to leverage the power of purchase intelligence outside the banking channel. The company was founded in 2008 and is headquartered in Atlanta, Georgia.

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