JPMorgan Chase & Co. has adjusted its price target for MediaAlpha (NYSE: MAX) from $15.00 to $11.00, reflecting a more pessimistic outlook for the stock. In a note issued to investors on Tuesday, the firm maintained an “overweight” rating, suggesting a potential upside of 14.76% from the stock’s previous close. This revision comes as various analysts express differing opinions on the company’s future performance.
In addition to JPMorgan’s update, Zacks Research downgraded MediaAlpha from a “hold” rating to a “strong sell” on January 29, 2024. Meanwhile, Keefe, Bruyette & Woods reduced their target price on MediaAlpha from $19.00 to $16.00 while maintaining an “outperform” rating. Royal Bank of Canada also cut its price target to $11.00, signaling a cautious approach toward the stock.
Despite these adjustments, Wall Street Zen upgraded MediaAlpha from a “buy” to a “strong-buy” rating on January 11, 2024. Currently, five research analysts have rated the company with a Buy, one has assigned a Hold rating, and two have given it a Sell rating. According to data from MarketBeat.com, MediaAlpha holds an average rating of “Hold” with a consensus price target of $14.58.
The company released its quarterly earnings data on February 23, 2024, reporting earnings per share (EPS) of $0.50, exceeding the consensus estimate of $0.25 by $0.25. The reported revenue for the quarter was $291.16 million, which fell short of analyst expectations of $296.42 million. MediaAlpha’s net margin was 2.30%, and it recorded a negative return on equity of 132.73%. Comparatively, the company’s quarterly revenue was down 3.2% from the same quarter the previous year, where it posted an EPS of $0.08.
Insider Trading and Institutional Activity
In related developments, Chief Revenue Officer Keith Cramer sold 10,000 shares of MediaAlpha on December 15, 2023, at an average price of $12.83, amounting to a total value of $128,300. Following this transaction, Cramer retained 187,169 shares, valued at approximately $2.4 million. The sale represented a 5.07% decrease in his holdings. This transaction was disclosed in a filing with the Securities and Exchange Commission.
Additionally, insider Steven Yi sold 12,748 shares on February 25, 2024, at an average price of $9.69, totaling around $123,528. Yi now holds 2,688,876 shares, valued at roughly $26.1 million, reflecting a 0.47% decrease in ownership. Over the past 90 days, insiders have sold a total of 516,745 shares worth $5,975,452, while corporate insiders collectively own 13.44% of the company’s stock.
Several institutional investors have also made significant moves regarding MediaAlpha. CWM LLC raised its position by 37.3% in the second quarter, now owning 22,681 shares valued at $248,000. Y Intercept Hong Kong Ltd increased its stake by an impressive 519.1%, acquiring an additional 136,459 shares for a total of $1.78 million. Teacher Retirement System of Texas lifted its position by 651.7%, now owning 149,933 shares worth $1.64 million.
Other notable changes include Corton Capital Inc., which grew its stake by 8.2%, and Campbell & Co. Investment Adviser LLC, which increased its holdings by 21.1%. Institutional investors now hold approximately 64.39% of MediaAlpha stock.
Understanding MediaAlpha’s Business Model
MediaAlpha, Inc. operates a digital marketplace that connects buyers seeking insurance policies with sellers, including insurance carriers and distribution partners. By utilizing programmatic bidding and data-driven pricing, the company enhances customer acquisition efficiency. MediaAlpha’s platform capitalizes on transaction-level data and proprietary auction mechanics, enabling clients to optimize marketing expenditures and improve conversion rates.
As the marketplace evolves, MediaAlpha faces challenges and opportunities that continue to shape analysts’ perspectives. With varying ratings from different research firms, investors may need to weigh the potential risks and rewards associated with the company’s stock as it navigates a competitive landscape.
