One of today’s biggest gainers in an otherwise down market is Cardlytics (NASDAQ:CDLX). At the time of this writing, CDLX stock is surging around 70% higher on extreme momentum and high volume.
Approximately 50 million shares have traded hands as of 1:30 p.m. Eastern, which is orders of magnitude above the stock’s average of around 750,000 shares traded daily. For this relatively small-cap stock, that has provided some significant upward pressure as investors seek high-momentum plays amid the current market.
Cardlytics is on the move as a result of its updated guidance for its upcoming first-quarter 2023 results. The company posted adjusted forward guidance significantly above the previous range.
Let’s dive into what the firm reported — and why investors are signaling this is a big deal for CDLX stock.
CDLX Stock Surges on Updated Guidance
Guidance still matters. For investors in relatively early-stage or unprofitable entities, gaining perspective on how quickly a given company will achieve profitability is a big deal. Indeed, in this current market, profitability is everything. Investors want growth, but they also want assurances that they’ll be paid back for their investments down the road.
Today, Cardlytics reported that its billings guidance has increased to the range of $93 million to $97 million. That’s up from the previous range of $84 million to $93 million. Accordingly, the company’s anticipated adjusted EBITDA has also improved to a loss of between $5 million and $8 million, which was previously a much larger loss of between $10 million and $17 million.
It’s worth noting that this is adjusted EBITDA and not bottom-line profits. However, the company’s ability to move faster toward operating profitability is clearly a good thing.
This company’s focus on cost control and improved growth outlook for its U.S. business is also encouraging. Cardlytics noted in its release:
“Despite a difficult macroeconomic environment, our shift to a product-led operating structure is already yielding positive results.”
Overall, this updated guidance gives investors a lot to be excited about. We’ll have to wait and see how the numbers come in. But for now, investors appear ready to hit the bid on a stock that’s down massively from its post-pandemic peak.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
