Financial Analysis: Acuity (NYSE:AYI) versus Cardlytics (NASDAQ:CDLX)

Acuity (NYSE:AYI) and Cardlytics (NASDAQ:CDLX) are both business services companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, valuation, analyst recommendations, institutional ownership, profitability and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Acuity and Cardlytics, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Acuity	0	4	5	0	2.56
Cardlytics	2	1	0	0	1.33

Acuity presently has a consensus target price of $369.17, indicating a potential upside of 21.04%. Cardlytics has a consensus target price of $1.00, indicating a potential upside of 48.19%. Given Cardlytics’ higher probable upside, analysts clearly believe Cardlytics is more favorable than Acuity.

Volatility and Risk

Acuity has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, Cardlytics has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500.

Institutional & Insider Ownership

98.2% of Acuity shares are owned by institutional investors. Comparatively, 68.1% of Cardlytics shares are owned by institutional investors. 2.9% of Acuity shares are owned by insiders. Comparatively, 5.9% of Cardlytics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Acuity and Cardlytics”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Acuity	$4.35 billion	2.13	$396.60 million	$13.64	22.36
Cardlytics	$211.16 million	0.18	-$103.49 million	($1.77)	-0.38

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Acuity	9.37%	20.74%	12.20%
Cardlytics	-46.03%	-956.56%	-34.57%

Summary

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

About Acuity

Acuity Brands, Inc. provides lighting, lighting controls, building management system, location-aware applications in the United States and internationally. The company operates in two segments, Acuity Brands Lighting and Lighting Controls (ABL); and the Intelligent Spaces Group (ISG). The ABL segment provides commercial, architectural, and specialty lighting solutions, as well as lighting controls and components for various indoor and outdoor applications under the A-Light, Aculux, American Electric Lighting, Cyclone, Dark to Light, eldoLED, Eureka, Gotham, Healthcare Lighting, Holophane, Hydrel, Indy, IOTA, Juno, Lithonia Lighting, Luminaire LED, Luminis, Mark Architectural Lighting, nLight, OPTOTRONIC, Peerless, RELOCWiring Solutions, and Sensor Switch. This segment serves electrical distributors, retail home improvement centers, electric utilities, national accounts, original equipment manufacturers, digital retailers, lighting showrooms, and energy service companies. The ISG segment offers building management solutions, such as products for controlling heating, ventilation, air conditioning, lighting, shades, refrigeration, and building access that deliver end-to-end optimization of those building systems; and building management software that enhances building system management and automates labor intensive tasks. This segment serves system integrators, as well as retail stores, airports, and enterprise campuses. The company offers its products and solutions under the Atrius, Distech Controls, and KE2 Therm Solutions brands. Acuity Brands, Inc. was incorporated in 2001 and is headquartered in Atlanta, Georgia.

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.