The Next Carvana? A Potential Cardlytics Stock Inflection With IndraStocks

Risk, reward, and investing when everyone else has thrown in the towel

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This week, we brought on IndraStocks (Twitter) to discuss Cardlytics:

The stock has a lot of the factors a contrarian investor might like.

It is in a 95% drawdown, meaning most of the prior shareholders are going to hate it and have a bias against the name.

It has a weird revenue recognition (talked at length in the show) that can mislead investors who don’t look deep enough at the fundamentals.

It is not profitable but making progress toward break-even soon.

Management is new.

There are new business developments that can potentially help profits/sales inflect higher (American Express, Bridge).

The stock trades at an EV/GP of 4.

Check. Check. Check.

Now, I don’t know if I like management, or whether Cardlytics is about to flip to profitability. I have not done enough research on them to have a strong opinion.

But this is a setup that can lead to fat outcomes over a 2 - 3 year period. Most people hate this stock. If you can get conviction on the few things that need to happen for Cardlytics to start generating a profit, this looks like a great risk/reward at current prices.

Which is why I think you should listen to this week’s interview.

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