Analyzing Owlet (NYSE:OWLT) and Cardlytics (NASDAQ:CDLX)

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

Valuation & Earnings

This table compares Cardlytics and Owlet”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cardlytics	$278.30 million	0.45	-$189.30 million	($3.65)	-0.65
Owlet	$78.10 million	1.86	-$12.54 million	($3.50)	-2.43

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

Analyst Ratings

This is a summary of recent ratings and price targets for Cardlytics and Owlet, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cardlytics	1	3	0	1	2.20
Owlet	1	0	2	1	2.75

Cardlytics currently has a consensus target price of $2.25, suggesting a potential downside of 5.06%. Owlet has a consensus target price of $10.25, suggesting a potential upside of 20.42%. Given Owlet’s stronger consensus rating and higher possible upside, analysts clearly believe Owlet is more favorable than Cardlytics.

Institutional & Insider Ownership

68.1% of Cardlytics shares are owned by institutional investors. Comparatively, 72.6% of Owlet shares are owned by institutional investors. 4.4% of Cardlytics shares are owned by company insiders. Comparatively, 52.2% of Owlet shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cardlytics	-68.87%	-279.39%	-48.17%
Owlet	-54.45%	-0.36%	-3.26%

Volatility & Risk

Cardlytics has a beta of 1.45, meaning that its share price is 45% more volatile than the S&P 500. Comparatively, Owlet has a beta of 1.82, meaning that its share price is 82% more volatile than the S&P 500.

Summary

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

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.

About Owlet

Owlet, Inc. provides digital parenting solutions in the United States and internationally. The company's platform focuses on giving real-time data and insights to parents. It offers Dream Sock, a wearable infant health monitor equipped with pulse oximetry technology to track vitals signs, such as pulse rate, oxygen, activity, and sleep patterns; BabySat which is intended for infants with heightened health risk; Owlet Cam, a monitoring device in smartphones that offers video and audio, predictive sleep insights, and cry detections; and accessories, including Owlet Sleeper, as well as Duo and Dream Duo that combines Smart Sock with the Owlet Cam. The company was founded in 2012 and is headquartered in Lehi, Utah.