Cardlytics WACC - Weighted Average Cost of Capital
The WACC of Cardlytics Inc (CDLX) is 5.4%.
| Range | Selected | |
| Cost of equity | 7.1% - 9.9% | 8.5% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 4.2% - 6.6% | 5.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.69 | 0.91 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.1% | 9.9% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 2.23 | 2.23 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 4.2% | 6.6% |
| Selected WACC | 5.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| CDLX | Cardlytics Inc | 2.23 | 2.43 | 0.93 |
| ADV | Advantage Solutions Inc | 4.69 | 1.29 | 0.29 |
| AIM.TO | Aimia Inc | 0.64 | 0.78 | 0.53 |
| BOMN | Boston Omaha Corp | 0.03 | 0.39 | 0.38 |
| CCO | Clear Channel Outdoor Holdings Inc | 10.55 | 1.68 | 0.19 |
| DBMM | Digital Brand Media & Marketing Group Inc | 2.16 | -1.42 | -0.55 |
| FLNT | Fluent Inc | 0.87 | 0.77 | 0.47 |
| ICLK | iClick Interactive Asia Group Ltd | 0.04 | -1.21 | -1.17 |
| NCMI | National Cinemedia Inc | 0.02 | 0.22 | 0.21 |
| SCOR | Comscore Inc | 2.12 | 1.14 | 0.45 |
| UCPA | United Communications Partners Inc | 0.2 | -0.78 | -0.68 |
| Low | High | |
| Unlevered beta | 0.21 | 0.38 |
| Relevered beta | 0.54 | 0.87 |
| Adjusted relevered beta | 0.69 | 0.91 |
Cardlytics's CAPM model and how its cost of Equity is calculated
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for Cardlytics:
cost_of_equity (8.50%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.69) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.