Should MediaAlpha Stock Be in Your Portfolio Pre-Q4 Earnings?

MediaAlpha, Inc. MAX will report its fourth-quarter 2024 results on Feb. 24, after market close.See Zacks Earnings Calendar to stay ahead of market-making news.The consensus estimate for total earnings is pinned at 24 cents per share, implying a more than 100% year-over-year rise. The Zacks Consensus Estimate for revenues in the to-be-reported quarter is pegged at $287.9 million, suggesting more than 100% growth on a year-over-year basis. Image Source: Zacks Investment Research The company has an impressive earnings surprise history. It surpassed the Zacks Consensus Estimate in the trailing four quarters, delivering an average earnings surprise of 109.7%.MediaAlpha’s Lesser Chance of Q4 Earnings BeatOur proven model does not conclusively predict an earnings beat for MAX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.MediaAlpha has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Higher Pricing & Volumes to Have Been MAX’s Drivers in Q4The company’s top line is likely to have been driven by Property & Casualty (P&C) transaction value benefiting from growing pricing and higher volumes as participation in MAX’s marketplaces continues to scale. The consensus mark for Transaction value is $488.1 million, suggesting more than 100% year-over-year growth.MediaAlpha Stock DeclinesMAX shares have declined 25.1% in the past six months. Its industry has surged 78% and the Zacks S&P 500 composite has risen 10.1%. The company’s stock has lost its value significantly in comparison with its industry peers, Agora, Inc. API and Outbrain Inc. OB. API has skyrocketed 163.3% and OB has gained 42.7% over the same period.Six Months' Price Performance Image Source: Zacks Investment Research The stock is looking cheaper and is currently trading at a trailing 12-month price-to-earnings ratio of 12.8X, well below the industry’s 50.9X. Image Source: Zacks Investment Research MediaAlpha’s Investment ConsiderationsMediaAlpha operates as the largest insurance customer acquisition media marketplace with strong long-term partnerships. This marketplace model is its key differentiator and provides a competitive edge that establishes the company as a growth partner of choice.MAX’s top line is anticipated to have been driven by momentum in the P&C vertical as auto insurance underwriting profitability improves. The multi-year extension with Insurify is instrumental in portraying MAX’s market leadership position, which enables it to evaluate opportunities to expand and deepen supply partnerships.Meanwhile, headwinds in the Medicare payer space are likely to hurt the health vertical despite the fourth quarter being seasonally strongest. The company does not pay or plans to pay dividends, which might raise questions about its cash position.Final Thoughts: Hold MediaAlpha for NowA robust marketplace model, coupled with healthy performance in the P&C vertical, sets the company for long-term growth. The ability to demonstrate market leadership is another advantage. However, headwinds in the Medicare payer domain and reluctance to pay dividends are concerning.While MAX remains fundamentally strong and possesses a discounted valuation, a cautious approach is warranted. This is because the steep fall in share prices over the past six months indicates declining investor confidence, which may result in a further price decline, especially if the company fails to beat on earnings.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Outbrain Inc. (OB): Free Stock Analysis Report Agora, Inc. Sponsored ADR (API): Free Stock Analysis Report MediaAlpha, Inc. (MAX): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks