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1. Company Snapshot

1.a. Company Description

MediaAlpha, 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.

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1.b. Last Insights on MAX

The recent performance of MediaAlpha, Inc. was negatively impacted by a Q4 earnings miss, with the company reporting a loss of $0.05 per share a year ago, and a subsequent earnings miss of $0.24 per share in Q4 2024. Additionally, the company faced a series of investigations and lawsuits, including securities fraud allegations, which may have contributed to the negative sentiment surrounding the company. Furthermore, the company's financial performance was not strong enough to offset the rising costs, and the company's growth prospects were not as robust as expected.

1.c. Company Highlights

2. MediaAlpha Delivers Record Q3 Results, Driven by P&C Insurance Growth

MediaAlpha reported record third-quarter results, with transaction value reaching $589 million, a 30% year-over-year increase, driven by a 41% growth in the P&C insurance vertical. Adjusted EBITDA was $29.1 million, an 11% increase year-over-year. The company's actual EPS came out at $0.26, beating estimates of $0.21. The strong financial performance was accompanied by a healthy free cash flow generation of $23.6 million, resulting in a net debt to adjusted EBITDA ratio below 1x and cash reserves of $39 million.

Publication Date: Nov -23

📋 Highlights
  • Record Q3 Transaction Growth:: Transaction value reached $589M (+30% YoY), with P&C insurance vertical up 41%.
  • Strong Adjusted EBITDA Growth:: Adjusted EBITDA rose to $29.1M (+11% YoY) amid 30% transaction growth.
  • Q4 Guidance:: Projected $620M–$645M transaction value (27% YoY growth) with a 7% take rate and 54% private marketplace share.
  • Share Repurchase Commitment:: Repurchased 5% of shares for $32.9M and authorized $50M in new buybacks, with $39M cash on hand.
  • Carrier Demand Expansion:: 13 carriers spent over $1M/month in Q3, signaling sustained marketing spend during multiyear soft market conditions.

Business Outlook and Industry Trends

The company expects the current soft market cycle in the P&C insurance vertical to sustain healthy marketing spend for years to come, driven by strong carrier profitability and robust market share competition. The health insurance vertical is expected to be impacted by a reset in under-65, but partnerships with leading Medicare Advantage carriers continue to perform well. The company's guidance for Q4 transaction value is between $620 million and $645 million, representing a 27% year-over-year increase.

Take Rate and Carrier Demand

The company expects its Q4 take rate to be approximately 7%, with private marketplace transactions representing around 54% of total transaction value. The take rate is expected to remain around 7% for Q4 and the start of 2026, with a broadening of demand expected to drive take rate improvement over time, primarily through the open marketplace. As Steven Yi noted, "carriers are still investing below their full potential, but we see momentum and a secular shift towards online advertising."

Valuation and Growth Prospects

With a P/S Ratio of 0.69 and an EV/EBITDA ratio of 8.48, the market appears to be pricing in moderate growth expectations. Analysts estimate next year's revenue growth at 9.5%. The company's focus on Medicare Advantage, a $0.5 trillion industry new to direct-to-consumer advertising, presents opportunities for integrated solutions to help carriers navigate the transition to a direct-to-consumer distribution model.

Share Repurchase and Capital Allocation

The company repurchased approximately 5% of its outstanding shares at a discount to market for $32.9 million and announced a new share repurchase authorization of up to $50 million. The company's net debt to adjusted EBITDA ratio below 1x and cash reserves of $39 million provide flexibility for future capital allocation decisions.

3. NewsRoom

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MAX Power Announces Neil McMillan as Chairman of the Board

Dec -04

Source: globenewswire.com

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MAX Power Initiates Next Phase at Canada's First Natural Hydrogen Well With Service Rig Mobilization to Lawson

Nov -27

Source: globenewswire.com

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MediaAlpha, Inc. (MAX) Just Overtook the 50-Day Moving Average

Nov -26

Source: zacks.com

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MAX STOCKHOLDER NOTICE: The Law Firm of Kaskela Law LLC is Investigating MediaAlpha, Inc. (NYSE: MAX) and Encourages Long-Term MAX Stockholders to Contact the Firm

Nov -25

Source: businesswire.com

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Wall Street Analysts Believe MediaAlpha (MAX) Could Rally 34.32%: Here's is How to Trade

Nov -24

Source: zacks.com

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Max Resource Conducts LiDAR Survey over the Entire Mora Gold Property

Nov -21

Source: newsfilecorp.com

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MediaAlpha (MAX) Is Attractively Priced Despite Fast-paced Momentum

Nov -19

Source: zacks.com

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MediaAlpha, Inc. $MAX Position Increased by Campbell & CO Investment Adviser LLC

Nov -18

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.90%)

6. Segments

Health Insurance

Expected Growth: 8.23%

MediaAlpha's Health Insurance segment growth of 8.23% is driven by increasing healthcare expenditure, an aging population, and government initiatives promoting health insurance adoption. Additionally, the company's digital marketing platform and data analytics capabilities enable insurers to effectively target and engage with customers, further fueling growth.

Property & Casualty Insurance

Expected Growth: 7.4%

MediaAlpha's Property & Casualty Insurance growth of 7.4% is driven by increasing online insurance shopping, rising demand for digital insurance platforms, and strategic partnerships with top carriers. Additionally, the company's data-driven marketing approach and proprietary technology platform enable efficient customer acquisition and retention, contributing to the segment's rapid growth.

Life Insurance

Expected Growth: 7.43%

MediaAlpha's 7.43% growth in Life Insurance is driven by increasing demand for online insurance platforms, strategic partnerships with leading carriers, and targeted marketing efforts. Additionally, the company's data-driven approach to customer acquisition and retention, as well as its user-friendly online experience, contribute to its rapid expansion in the life insurance market.

Other

Expected Growth: 10.43%

MediaAlpha's 10.43% growth is driven by increasing demand for insurance comparison platforms, expansion into new markets, and strategic partnerships. The company's proprietary technology and data analytics capabilities also contribute to its growth, enabling it to optimize customer acquisition costs and improve conversion rates.

7. Detailed Products

MediaAlpha for Advertisers

A platform that enables advertisers to reach their target audience across multiple channels, including search, display, and native ads.

MediaAlpha for Publishers

A solution that helps publishers monetize their online properties by connecting them with top advertisers and optimizing ad revenue.

MediaAlpha for Agencies

A platform that enables agencies to manage multiple client campaigns across various channels, including search, social, and display ads.

MediaAlpha for Data Providers

A solution that enables data providers to monetize their data assets by connecting them with advertisers and agencies.

8. MediaAlpha, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

MediaAlpha, Inc. operates in a niche market, but there are some substitutes available. However, the company's strong brand recognition and customer loyalty mitigate the threat of substitutes.

Bargaining Power Of Customers

MediaAlpha, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products and services are highly specialized, making it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

MediaAlpha, Inc. relies on a few key suppliers for its operations. While the company has some bargaining power due to its size and reputation, suppliers still have some leverage in negotiations.

Threat Of New Entrants

The digital marketing industry is highly competitive, and new entrants can easily enter the market. MediaAlpha, Inc. must continuously innovate and improve its products and services to stay ahead of new competitors.

Intensity Of Rivalry

The digital marketing industry is highly competitive, and MediaAlpha, Inc. faces intense rivalry from established players. The company must focus on differentiating its products and services to maintain its market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 106.24%
Debt Cost 8.81%
Equity Weight -6.24%
Equity Cost 10.57%
WACC 8.70%
Leverage -1701.99%

11. Quality Control: MediaAlpha, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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comScore

A-Score: 3.9/10

Value: 7.8

Growth: 3.7

Quality: 2.9

Yield: 0.0

Momentum: 8.0

Volatility: 1.0

1-Year Total Return ->

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Groupon

A-Score: 3.9/10

Value: 5.1

Growth: 2.0

Quality: 4.4

Yield: 0.0

Momentum: 10.0

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
MediaAlpha

A-Score: 3.6/10

Value: 7.0

Growth: 4.7

Quality: 5.8

Yield: 0.0

Momentum: 1.0

Volatility: 3.0

1-Year Total Return ->

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BuzzFeed

A-Score: 3.3/10

Value: 8.3

Growth: 3.1

Quality: 4.8

Yield: 0.0

Momentum: 2.5

Volatility: 1.3

1-Year Total Return ->

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Stock-Card
Vivid Seats

A-Score: 3.2/10

Value: 9.8

Growth: 3.9

Quality: 4.0

Yield: 0.0

Momentum: 0.0

Volatility: 1.3

1-Year Total Return ->

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TrueCar

A-Score: 2.9/10

Value: 8.4

Growth: 3.0

Quality: 4.5

Yield: 0.0

Momentum: 0.5

Volatility: 1.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

13.48$

Current Price

13.48$

Potential

-0.00%

Expected Cash-Flows