096: Cardlytics Destination Analysis Using The Cardlytics Formula
Sep 21, 2023
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The podcast covers a range of topics including the Manchester United buyout, the coal industry's potential for investment opportunities, Cardlytics' acquisition of Bridge for product level ads, and the importance of staying committed to a long-term investing strategy. It also delves into the mechanism behind body weight and food intake control, as well as the speaker's personal journey towards sobriety and weight loss goals.
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Quick takeaways
Increasing ARPU is crucial for Cardlytics' growth prospects and can be achieved by offering product-level ads and targeting specific categories.
The acquisition of Bridge and the introduction of Ripple indicate Cardlytics' potential as a spawner, offering significant growth opportunities through a retail media network.
Considering the risk and reward ratio, there is substantial upside potential and a significant return on investment in Cardlytics stock if factors such as increased bank partners and higher ARPU align.
Deep dives
Cardlytics Formula: The Potential for Increased ARPU
The Cardlytics formula calculates the potential stock price based on average revenue per user (ARPU). Currently, the ARPU is around $1.50, but there is potential for growth. By increasing the ARPU to $3, the estimated stock price could reach $9. If the ARPU is increased to $5, the stock price could potentially be $58.
The Importance of Increased ARPU for Cardlytics
Increasing the ARPU is crucial for Cardlytics' growth prospects. By offering product-level ads and targeting specific categories, the company can attract more advertisers and encourage higher spending. Factors such as the new user interface, the recovering advertising industry, and the rising mobile bank usage contribute to the potential for increased ARPU.
The Spawner Potential of Ripple and the Retail Media Network
The acquisition of Bridge and the introduction of Ripple indicate Cardlytics' potential as a spawner. Ripple's focus on creating a retail media network for regional grocery and convenience stores could offer a significant growth opportunity. With the ability to run product-level ads, Cardlytics may attract more advertisers and generate higher revenues, potentially surpassing the bank business in terms of value and free cash flow.
The Train Leaving the Station: Projected Stock Price Growth
With the potential for increased ARPU and the spawner potential of Ripple, Cardlytics' stock price could experience significant growth. While the current stock price is around $15.50, an ARPU of $5 could result in a stock price of $58. This growth would be driven by factors such as user growth, improved campaign management, the expansion of the retail media network, and an enhanced user interface.
Understanding the Risk and Reward in Investing
The speaker contemplates the investment potential of a particular stock, highlighting the importance of considering the risk and reward ratio. They analyze the potential increase in average revenue per user (ARPU) and compare it to other platforms like Pinterest and Snap. Despite acknowledging the uncertainty, the speaker believes in the possibility of substantial upside potential and a significant return on investment if specific factors align, such as increased bank partners and higher ARPU. They emphasize the importance of staying focused on the long-term vision and maintaining confidence in the investment.
The Battle Against Obesity and Strategies for Weight Loss
The speaker discusses their personal struggle with weight loss and shares insights from an article regarding the biology of obesity and weight management. They mention the existence of an individual 'dial' in the brain that regulates fat storage and appetite. They also highlight the impact of becoming obese on this dial, making it more challenging to control eating habits. The speaker shares their strategies for weight loss, including establishing a fasting routine and drawing parallels with addiction recovery. They express confidence in the effectiveness of their approach and the potential for gradual weight loss.
