MediaAlpha, Inc. (NYSE: MAX)

Sector: Communication Services Industry: Internet Content & Information CIK: 0001818383
Market Cap 421.39 Mn
P/B -14.16
P/E -368.67
P/S 0.38
ROIC (Qtr) 12.84
Div Yield % 0.00
Rev 1y % (Qtr) 18.28
Total Debt (Qtr) 155.69 Mn
Debt/Equity (Qtr) -5.23

About

MediaAlpha, Inc., often referred to as MAX, is a technology company that operates a prominent online customer acquisition platform for the insurance industry. The company's platform serves as a bridge between leading insurance carriers and high-intent consumers, facilitating real-time, programmatic, transparent, and results-driven transactions. MediaAlpha's primary business activities involve providing a technology platform that enables insurance carriers and distributors to acquire customers and optimize customer acquisition costs to align with...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 87.58M provides robust 0.56x coverage of total debt 155.69M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 72.34M provide 3.29x coverage of short-term debt 22M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 87.58M provides exceptional 71.78x coverage of minority interest expenses 1.22M, showing strong core operations.
  • Robust free cash flow of 87.23M exceeds capital expenditure of 347000 by 251.38x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 214.39M provides 13.35x coverage of working capital 16.05M, indicating strong operational backing.

Bear case

  • Operating cash flow of 87.58M barely covers its investment activities of (347000), with a coverage ratio of -252.38, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (347000) provide weak support for R&D spending of 21.09M, which is -0.02x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of 87.58M shows concerning coverage of stock compensation expenses of 30.43M, with a 2.88 ratio indicating potential earnings quality issues.
  • Operating earnings of 11.92M show weak coverage of depreciation charges of 5.23M, with a 2.28 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 87.23M represents just -8.92x of debt issuance (9.78M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Internet Content & Information
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GOOGL Alphabet Inc. 4,538.16 Bn 131.46 27.23 33.71 Bn
2 META Meta Platforms, Inc. 1,747.49 Bn 74.30 23.25 51.06 Bn
3 SPOT Spotify Technology S.A. 103.00 Bn 62.32 5.18 2.57 Bn
4 BIDU Baidu, Inc. 62.73 Bn 49.63 3.42 13.66 Bn
5 RDDT Reddit, Inc. 32.18 Bn 92.16 16.90 0.03 Bn
6 NBIS Nebius Group N.V. 27.81 Bn 127.53 81.80 4.51 Bn
7 TME Tencent Music Entertainment Group 24.66 Bn 15.77 5.54 0.54 Bn
8 PINS Pinterest, Inc. 16.95 Bn 8.53 4.18 0.21 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.86 1.10
EV to Cash from Ops. EV/CFO 5.64 -3.08
EV to Debt EV to Debt 3.17 28.98
EV to EBIT EV/EBIT 41.45 -26.54
EV to EBITDA EV/EBITDA 21.22 9.30
EV to Free Cash Flow [EV/FCF] EV/FCF 5.66 -67.01
EV to Market Cap EV to Market Cap 1.17 0.90
EV to Revenue EV/Rev 0.44 61.25
Price to Book Value [P/B] P/B -14.16 1.56
Price to Earnings [P/E] P/E -368.67 2.92
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.33
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -8.92
Dividend per Basic Share Div per Share (Qtr) 0.00 0.31
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.58
Interest Coverage Int. cover (Qtr) 1.01 -202.56
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -57.73 -24.06
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 123.94 175.36
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.94
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -680.74 31.53
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -28.41 -472.14
EBIT Growth (1y) % EBIT 1y % (Qtr) -51.10 32.66
EBT Growth (1y) % EBT 1y % (Qtr) -99.00 -25.80
EPS Growth (1y) % EPS 1y % (Qtr) -117.65 -18.36
FCF Growth (1y) % FCF 1y % (Qtr) 139.53 20.83
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 46.92 19.58
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 4.22 0.74
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.38 1.54
Current Ratio Curr Ratio (Qtr) 1.09 3.38
Debt to Equity Ratio Debt/Equity (Qtr) -5.23 -0.39
Interest Cover Ratio Int Coverage (Qtr) 1.01 -202.56
Times Interest Earned Times Interest Earned (Qtr) 1.01 -202.56
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 1.50 -4,283.87
EBIT Margin % EBIT Margin % (Qtr) 1.06 -4,786.62
EBT Margin % EBT Margin % (Qtr) 0.01 -5,002.12
Gross Margin % Gross Margin % (Qtr) 15.30 58.65
Net Profit Margin % Net Margin % (Qtr) -0.10 -5,003.08