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MediaAlpha (MAX)
NYSE:MAX
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MediaAlpha (MAX) AI Stock Analysis

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MAX

MediaAlpha

(NYSE:MAX)

Rating:56Neutral
Price Target:
$12.50
▲(0.81% Upside)
MediaAlpha's overall stock score is driven by financial challenges, including negative profitability and high leverage, which weigh heavily on the score. However, positive technical indicators and strategic corporate actions, such as share repurchases and resolving regulatory issues, provide some support. The mixed earnings call results and valuation concerns further moderate the score.
Positive Factors
Customer Acquisition
Moderating rates could counter-intuitively represent a tailwind for customer acquisition platforms.
Earnings
MediaAlpha reported strong Q1 results, with Transaction Value, revenue, and adj. EBITDA all coming in solidly ahead of expectations.
Growth Potential
Structural shifts within advertising such as growth of direct distribution and mix shift toward digital channels can drive sustainable double-digit growth.
Negative Factors
Health Vertical
Lower adjusted EBITDA is expected due to a decrease in the higher-margin health vertical.
Regulatory Impact
The most notable development this quarter was the announcement that the company reached a resolution with the FTC, in which MediaAlpha admitted no wrongdoing but agreed to pay $45M and implement additional compliance procedures within the under-65 Health segment.
Regulatory Uncertainty
Uncertainty from the ongoing FTC investigation regarding the company’s under-65 health business will keep the stock under pressure in the near term.

MediaAlpha (MAX) vs. SPDR S&P 500 ETF (SPY)

MediaAlpha Business Overview & Revenue Model

Company DescriptionMediaAlpha, Inc., through its subsidiaries, operates an insurance customer acquisition platform in the United States. It optimizes customer acquisition in various verticals of property and casualty insurance, health insurance, and life insurance. The company was founded in 2014 and is headquartered in Los Angeles, California. MediaAlpha, Inc. is a subsidiary of White Mountains Insurance Group, Ltd.
How the Company Makes MoneyMediaAlpha generates revenue primarily through a performance-based model, where it charges insurance companies for leads generated from its platform. The company earns a fee for each qualified lead that is delivered to its clients, which creates a direct link between advertising spend and measurable outcomes. Additionally, MediaAlpha may earn revenue from transactional fees associated with the buying and selling of ad space on its platform. Key partnerships with leading insurance carriers and a growing network of publishers enhance its revenue potential by increasing the volume of transactions and leads processed through the platform.

MediaAlpha Earnings Call Summary

Earnings Call Date:Aug 06, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed picture with strong growth in the P&C vertical and a positive resolution with the FTC, but significant challenges in the health insurance vertical and a declining under-65 business. Financial performance remains solid, but future growth in certain segments is uncertain.
Q2-2025 Updates
Positive Updates
Strong Growth in P&C Vertical
Transaction value for the P&C vertical grew by 71% year-over-year, driven by increased marketing investments from leading auto insurance carriers and new supply partner wins.
Positive Resolution with FTC
MediaAlpha reached a settlement with the FTC, resolving the investigation into their under-65 health insurance business with a $45 million payment. This is seen as a positive step forward.
Solid Financial Performance
Adjusted EBITDA for the quarter was $24.5 million, increasing by 31% year-over-year. Cash flow generation was strong, with $22 million generated in Q2.
Extension of Debt Maturity
MediaAlpha extended the maturity of $142.6 million of its $156.3 million indebtedness by one year, providing financial flexibility.
Negative Updates
Decline in Health Insurance Vertical
Transaction value in the health vertical declined by 32% year-over-year, with a further expected decline of 40-45% year-over-year in Q3.
Challenges in Under-65 Business
The under-65 business experienced a 54% year-over-year decline in Q3 transaction value and an 80% decline in contribution, reflecting a reset in scale and profitability.
Muted Demand in Medicare Advantage
Medicare Advantage carrier budgets are expected to be lighter due to pricing adjustments and anticipated consumer churn, causing muted demand.
Company Guidance
During the MediaAlpha Inc. Second Quarter 2025 Earnings Call, the company provided guidance for the third quarter of 2025, highlighting expectations for record transaction value between $545 million and $570 million, representing a year-over-year increase of 23% at the midpoint. Revenue is projected to be between $270 million and $290 million, reflecting an 8% increase year-over-year at the midpoint. Adjusted EBITDA is anticipated to be between $25.5 million and $27.5 million, marking a 1% rise year-over-year at the midpoint, despite an expected $4 million impact from a decline in under-65 contribution. The company foresees a 35% year-over-year growth in P&C transaction value, while the health vertical is expected to see a decline of approximately 40% to 45% year-over-year. Additionally, MediaAlpha plans to increase overhead by about $1 million to support growth, while maintaining financial flexibility with significant cash flow generation and a net debt to adjusted EBITDA ratio of 0.6x.

MediaAlpha Financial Statement Overview

Summary
MediaAlpha demonstrates a mixed financial profile. Revenue growth is on an upward trend, but profitability margins are thin, and the company faces high leverage risks. Cash flow performance is a strength, showing efficient cash generation, but balance sheet constraints could pose risks if not managed carefully.
Income Statement
55
Neutral
The company shows a mixed income performance with a TTM gross profit margin of 15.95% and net profit margin of 1.58%. Revenue growth has been volatile with recent TTM growth of 15.90%, suggesting improving sales. However, EBIT and EBITDA margins are relatively low at 4.09% and 3.94% respectively, indicating potential cost structure challenges.
Balance Sheet
40
Negative
The balance sheet reveals high leverage with a debt-to-equity ratio of 1.12. The return on equity (ROE) is modest at 199.49%, driven by low equity levels. The equity ratio is weak at 3.30%, suggesting financial instability and reliance on debt financing.
Cash Flow
65
Positive
The cash flow statement reflects a solid position with a TTM free cash flow of $67.62 million and a robust operating cash flow to net income ratio of 4.30. The free cash flow to net income ratio is notably high at 4.28, indicating efficient cash generation relative to reported profits.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.08B864.70M388.15M459.07M645.27M584.81M
Gross Profit167.03M143.57M66.71M70.06M101.52M85.38M
EBITDA11.85M44.53M-34.43M46.60M2.15M20.72M
Net Income-6.57M16.63M-40.42M-72.45M-8.47M10.56M
Balance Sheet
Total Assets249.42M262.45M153.93M170.08M289.80M213.93M
Cash, Cash Equivalents and Short-Term Investments85.38M43.27M17.27M14.54M50.56M23.55M
Total Debt158.02M162.44M174.30M183.07M186.80M182.67M
Total Liabilities306.38M308.68M248.35M256.17M351.37M315.45M
Stockholders Equity-3.77M2.38M-10.29M-15.99M-4.34M-101.52M
Cash Flow
Free Cash Flow71.69M45.62M20.16M28.18M27.97M51.11M
Operating Cash Flow72.01M45.87M20.23M28.27M28.62M51.41M
Investing Cash Flow-722.00K-654.00K-73.00K-49.77M-650.00K-10.30M
Financing Cash Flow-14.56M-19.22M-17.43M-14.52M-961.00K-27.59M

MediaAlpha Technical Analysis

Technical Analysis Sentiment
Positive
Last Price12.40
Price Trends
50DMA
10.49
Positive
100DMA
10.17
Positive
200DMA
10.46
Positive
Market Momentum
MACD
0.30
Negative
RSI
71.13
Negative
STOCH
82.47
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MAX, the sentiment is Positive. The current price of 12.4 is above the 20-day moving average (MA) of 10.51, above the 50-day MA of 10.49, and above the 200-day MA of 10.46, indicating a bullish trend. The MACD of 0.30 indicates Negative momentum. The RSI at 71.13 is Negative, neither overbought nor oversold. The STOCH value of 82.47 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$1.59B22.148.57%4.38%29.62%-19.65%
74
Outperform
$868.64M18.9634.34%92.91%
60
Neutral
$46.29B4.07-13.11%4.12%1.85%-42.71%
58
Neutral
$544.81M-42.15%-13.60%69.70%
56
Neutral
$813.97M35.76-115.07%116.58%62.29%
54
Neutral
$793.88M-14.27%9.65%56.50%
49
Neutral
$158.60M-16.75%19.67%-1183.48%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MAX
MediaAlpha
12.40
-5.66
-31.34%
EVER
EverQuote
23.54
1.23
5.51%
OPRA
Opera
17.82
4.47
33.48%
THRY
Thryv Holdings
12.50
-4.80
-27.75%
NXDR
Nextdoor Holdings
2.07
-0.20
-8.81%
TEAD
Teads Holding
1.63
-2.98
-64.64%

MediaAlpha Corporate Events

Stock BuybackBusiness Operations and Strategy
MediaAlpha Completes $32.9 Million Share Repurchase
Positive
Sep 5, 2025

On September 3, 2025, MediaAlpha, Inc. entered into an agreement to repurchase 3,234,894 shares of its Class A common stock from Insignia Capital Group for approximately $32.9 million, a transaction that closed on September 4, 2025. This strategic move, approved by a special committee of independent directors, reflects MediaAlpha’s confidence in its growth prospects and commitment to shareholder value, while Insignia’s exit aligns with its private equity fund lifecycle.

Legal ProceedingsRegulatory Filings and Compliance
MediaAlpha Settles FTC Claims with $45 Million Agreement
Negative
Aug 7, 2025

On August 6, 2025, MediaAlpha, Inc. reached a settlement with the Federal Trade Commission (FTC) regarding claims of unfair or deceptive practices. The FTC approved a Consent Order requiring MediaAlpha to pay $45 million in monetary relief and implement various compliance measures related to its advertising and marketing practices. The settlement aims to address issues concerning the company’s handling of consumer information and adherence to telemarketing rules.

Private Placements and FinancingLegal ProceedingsBusiness Operations and StrategyFinancial Disclosures
MediaAlpha Amends Credit Agreement for Financial Flexibility
Positive
Aug 6, 2025

On August 4, 2025, MediaAlpha subsidiaries QuoteLab, LLC and QL Holdings LLC amended their credit agreement, extending the maturity dates for certain loans and commitments. This amendment affects $138.1 million in term loans and $45.6 million in revolving commitments, providing financial flexibility. Additionally, MediaAlpha announced strong financial results for Q2 2025, with a 41% revenue increase and a 71% growth in transaction value in the property & casualty vertical. Despite a net loss, the company resolved an FTC inquiry and anticipates continued growth in 2025.

Executive/Board ChangesBusiness Operations and Strategy
MediaAlpha Promotes Amy Yeh to Chief Technology Officer
Neutral
Jun 30, 2025

On June 30, 2025, MediaAlpha announced the promotion of Amy Yeh to Chief Technology Officer, succeeding Eugene Nonko, who transitioned to the role of Chief Architect. This leadership change is part of a strategic move to enhance the company’s technology strategy and execution, with Amy Yeh expected to continue driving product innovation and operational scale within MediaAlpha’s insurance marketplace.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Sep 06, 2025