Stephens Inc. Analyst Brett Huff says that Alliance Data Systems Corporation (ADS) has two businesses, digital marketing and retail credit cards, that will benefit from strong online advertising tailwinds.
“The reason we like this business is two of the three of their businesses, namely Epsilon and the retail card private label business, we think are poised to participate in the strong secular tailwind of more advertising going online to our phones, to PCs, etc. They are part of that strong secular trend,” Huff said.
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Alliance Data Systems’ retail card base differentiates the company from its competitors, Huff says. Based on its digital marketing expertise, ADS is able to help merchants achieve significantly higher sales.
“They help particular companies market to their customers who have these private label cards,” Huff said. “It allows the collaboration between Alliance Data and the company to help that company drive incremental same-store sales from those customers. In some cases they can double or triple the same-store sales for companies that are using their private label card versus those who don’t.”
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