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MediaAlpha (MAX)
NYSE:MAX
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MediaAlpha
(NYSE:MAX)
60Neutral
Positive Factors
Market Recovery
MAX is well positioned to benefit from the auto carrier recovery that is expected to continue building, which should support strong revenue growth and margin expansion.
Revenue Growth
MediaAlpha's Q1 revenue guidance shows a substantial year-over-year increase, highlighting expected strong financial performance.
Stock Valuation
MAX stock now trades at an extremely attractive valuation relative to the rapidly expanding revenue base.
Negative Factors
Guidance Performance
Despite a strong 4Q performance, the guidance for 1Q is below expectations, indicating cautiousness in the market.
Health Sector Challenges
Health remains a challenge with continued headwinds from Medicare Advantage and now Under 65, affecting transaction values.
Regulatory Risks
The ongoing FTC investigation poses a risk, and the price target is lowered to reflect this and other downward estimate revisions.
MediaAlpha (MAX) vs. S&P 500 (SPY)
Market Cap
$567.42M
Dividend YieldN/A
Average Volume (3M)601.13K
Price to Earnings (P/E)27.9
Beta (1Y)0.88
Revenue Growth122.78%
EPS GrowthN/A
CountryUS
Employees144
SectorCommunication Services
Sector Strength83
IndustryInternet Content & Information
Share Statistics
EPS (TTM)0.30
Shares Outstanding55,895,645
10 Day Avg. Volume552,301
30 Day Avg. Volume601,125
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.75
Price to Cash Flow (P/CF)11.20
P/FCF Ratio11.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$16.00Price Target Upside90.25% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
MediaAlpha Business Overview & Revenue Model
Company DescriptionMediaAlpha, Inc. (NASDAQ: MAX) is a leading technology company specializing in programmatic advertising platforms. It operates primarily within the insurance, travel, and other vertical markets, providing a robust platform that facilitates the buying and selling of performance media through transparent and data-driven methods. The company's innovative approach allows advertisers to efficiently reach target audiences while enabling publishers to optimize monetization efforts through a seamless, real-time exchange of information.
How the Company Makes MoneyMediaAlpha generates revenue by connecting advertisers with publishers through its sophisticated programmatic platform. The company earns money primarily by taking a percentage of the transaction value when advertisers purchase media through its platform. This model allows MediaAlpha to benefit from the volume and value of transactions conducted via its system. Significant partnerships with major insurance companies, travel agencies, and other industries enhance its platform's attractiveness and drive revenue growth. MediaAlpha's transparent approach and data-rich environment enable advertisers to optimize their spending, which in turn encourages higher platform usage and increases transaction fees.
MediaAlpha Financial Statement Overview
Summary
MediaAlpha has shown substantial revenue growth and a return to profitability, reflecting positively on its income statement. However, the company faces challenges with high leverage and a weak equity position, which could pose financial risks. The strong cash flow performance mitigates some of these risks, but sustainability depends on continued revenue growth and effective debt management.Income Statement
The company exhibited strong revenue growth, with a significant increase from $388 million in 2023 to $865 million in 2024. The gross profit margin improved to 16.60% in 2024, up from 17.18% in 2023. The net profit margin turned positive at 1.92% after a net loss in the previous year. This indicates a positive shift in profitability. However, the EBIT margin, while improved, remains low at 4.94%, suggesting room for operational efficiency improvements.75
Positive
Balance Sheet
The balance sheet shows a high debt-to-equity ratio due to the low equity position, with total liabilities exceeding total assets. The equity ratio is very low at 0.91%, indicating high leverage and potential financial risk. While there is a positive trend in reducing net debt, the company’s financial stability could be a concern due to the high leverage.45
Neutral
Cash Flow
The company has demonstrated strong cash flow management, with a significant increase in free cash flow to $45.6 million in 2024 from $20.2 million in 2023, representing a 125.74% growth. The operating cash flow to net income ratio is favorable, indicating effective conversion of earnings to cash. However, the reliance on financing activities to manage cash flows could pose a risk if external financing conditions change.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 864.70M | 388.15M | 459.07M | 645.27M | 584.81M | Gross Profit |
| 143.57M | 66.71M | 70.06M | 101.52M | 85.38M | EBIT |
| 42.73M | -39.92M | 39.70M | -1.69M | 19.54M | EBITDA |
| 44.53M | -34.43M | 46.60M | 2.15M | 20.72M | Net Income Common Stockholders |
| 16.63M | -40.42M | -72.45M | -8.47M | 10.56M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 43.27M | 17.27M | 14.54M | 50.56M | 23.55M | Total Assets |
| 262.45M | 153.93M | 170.08M | 289.80M | 213.93M | Total Debt |
| 8.85M | 174.30M | 183.07M | 186.80M | 182.67M | Net Debt |
| -34.42M | 157.03M | 168.53M | 136.24M | 159.11M | Total Liabilities |
| 308.68M | 248.35M | 256.17M | 351.37M | 315.45M | Stockholders Equity |
| 2.38M | -10.29M | -15.99M | -4.34M | -101.52M |
| Cash Flow | Free Cash Flow | |||
| 45.62M | 20.16M | 28.18M | 27.97M | 51.11M | Operating Cash Flow |
| 45.87M | 20.23M | 28.27M | 28.62M | 51.41M | Investing Cash Flow |
| -654.00K | -73.00K | -49.77M | -650.00K | -10.30M | Financing Cash Flow |
| -19.22M | -17.43M | -14.52M | -961.00K | -27.59M |
MediaAlpha Technical Analysis
Neutral
8.41
Price Trends
9.24
Negative
10.34
Negative
13.25
Negative
Market Momentum
-0.34
Negative
48.87
Neutral
87.96
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MAX, the sentiment is Neutral. The current price of 8.41 is above the 20-day moving average (MA) of 8.14, below the 50-day MA of 9.24, and below the 200-day MA of 13.25, indicating a neutral trend. The MACD of -0.34 indicates Negative momentum. The RSI at 48.87 is Neutral, neither overbought nor oversold. The STOCH value of 87.96 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MAX.
MediaAlpha Risk Analysis
MediaAlpha disclosed 59 risk factors in its most recent earnings report. MediaAlpha reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
MediaAlpha Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $834.87M | 26.84 | 29.75% | ― | 73.72% | ― | |
74 Outperform | $1.37B | 17.07 | 8.64% | 5.02% | 20.42% | -36.54% | |
60 Neutral | $567.42M | 27.89 | -115.07% | ― | 122.78% | ― | |
59 Neutral | $13.71B | 6.83 | -3.41% | 3.82% | 2.31% | -35.16% | |
53 Neutral | $587.31M | ― | -42.46% | ― | -10.12% | 72.31% | |
53 Neutral | $359.79M | ― | -0.31% | ― | -4.91% | -107.37% | |
46 Neutral | $579.45M | ― | -19.38% | ― | 13.27% | 34.93% |
* Communication Services Sector Average
Performance Comparison
MAX
MediaAlpha
8.41
-10.38
-55.24%
EVER
EverQuote
23.37
3.79
19.36%
OPRA
Opera
15.53
3.05
24.44%
THRY
Thryv Holdings
13.43
-9.97
-42.61%
KIND
Nextdoor Holdings
1.50
-0.54
-26.47%
OB
Outbrain
3.83
-0.33
-7.93%
MediaAlpha Earnings Call Summary
Earnings Call Date: Feb 24, 2025 | % Change Since: -26.29% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong financial performance and growth in the P&C insurance vertical, with positive expectations for future growth. However, challenges in the health insurance vertical and an ongoing FTC investigation present significant concerns. Overall, the company's achievements are tempered by these challenges.Highlights
Exceptional Financial Performance
Transaction value grew by more than 150% and adjusted EBITDA grew by over 200% year-over-year in 2024. The company delivered record fourth-quarter results across all key performance metrics.
Strength in P&C Insurance Vertical
P&C transaction value was up sequentially and above normal seasonality due to higher year-over-year pricing and volumes. P&C transaction value is expected to grow approximately 170% year-over-year in Q1 2025.
Positive Long-term Outlook for Medicare Advantage
Despite near-term pressures, the Medicare Advantage market, a several $100 billion industry, is at a nascent stage of online advertising adoption, presenting a significant long-term growth opportunity.
Deleveraging and Strong Cash Position
The company ended the quarter with $43 million of cash and a net debt to 2024 adjusted EBITDA of less than 1.3 times, indicating solid progress in deleveraging.
Guidance for Q1 2025
Q1 transaction value is expected to be between $415 million and $440 million, revenue between $225 million and $245 million, and adjusted EBITDA between $24.5 million and $26.5 million, all showing significant year-over-year growth.
Lowlights
Health Insurance Vertical Challenges
Transaction value in the health vertical was down 8% year-over-year in Q4 2024, with further declines expected in Q1 2025 due to ongoing headwinds in Medicare Advantage and softening in under-65 demand.
FTC Investigation and Settlement Demand
The company received a draft complaint and settlement demand from the FTC related to the under-65 health insurance business. An accrual of $7 million was recorded, with ongoing discussions to resolve the matter.
Company Guidance
In the MediaAlpha, Inc. earnings call for the fourth quarter and full year of 2024, the company provided financial guidance for the first quarter of 2025, highlighting several key metrics. The company expects Q1 transaction value to range between $415 million and $440 million, marking a year-over-year increase of 95% at the midpoint. Revenue is projected to be between $225 million and $245 million, an 86% increase year-over-year at the midpoint. Adjusted EBITDA is anticipated to fall between $24.5 million and $26.5 million, reflecting a 77% increase at the midpoint compared to the previous year. The company also expects overhead to rise by approximately $500,000 to $1 million due to selective headcount additions to support growth. Additionally, they reported strong performance in 2024, with transaction value growing over 150% and adjusted EBITDA increasing by more than 200% year-over-year. Looking forward, the P&C transaction value is expected to grow by approximately 170% year-over-year in Q1, albeit with a high single-digit sequential decline, while the health vertical is expected to face a high-teens percentage decline year-over-year.MediaAlpha Corporate Events
Executive/Board Changes
MediaAlpha Appoints Bradley Hunt to Board of Directors
Positive
Mar 31, 2025
On March 31, 2025, MediaAlpha announced the appointment of Bradley Hunt to its Board of Directors, succeeding Jennifer Moyer, who decided not to stand for re-election. Hunt, a seasoned executive with extensive experience in the health insurance sector, is expected to enhance MediaAlpha’s market position and shareholder value. His appointment follows the company’s transition from being a controlled company in May 2024. Moyer’s departure marks the end of her significant contributions since MediaAlpha’s IPO, for which the board expressed gratitude.
Executive/Board Changes
MediaAlpha Updates Executive Compensation Plans for 2025
Neutral
Feb 10, 2025
On February 4, 2025, MediaAlpha’s Compensation Committee approved changes to the employment agreements of executives Steven Yi and Eugene Nonko. Steven Yi will now participate in the annual cash incentive plan starting with fiscal 2025 bonuses, replacing his previous performance-vesting restricted stock units. Eugene Nonko, who will retire as Chief Technology Officer on June 30, 2025, will not receive performance-vesting restricted stock units for 2025.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.