Analyst Michael Graham from Canaccord Genuity maintained a Buy rating on MediaAlpha (MAX – Research Report) and decreased the price target to $15.00 from $26.00.
Michael Graham has given his Buy rating due to a combination of factors, primarily driven by MediaAlpha’s strong financial performance and growth prospects. The company’s Q4 results exceeded expectations, with significant year-over-year growth in transaction value and revenue, particularly in the Property & Casualty (P&C) segment. This growth is attributed to the ongoing recovery in the auto insurance sector and increased spending by P&C carriers, which are still in the early stages of their marketing efforts.
Additionally, despite the ongoing FTC investigation, MediaAlpha’s management has shown confidence in resolving the issue, as evidenced by the $7 million reserve set aside for a potential settlement. This amount is considered reasonable and could positively impact the stock if a favorable settlement is reached. Furthermore, the company’s Q1 guidance, although slightly below consensus, still indicates substantial year-over-year growth, reinforcing the potential for continued momentum. These factors, combined with the stock’s attractive valuation relative to its expanding revenue base, support the Buy rating.
In another report released today, KBW also maintained a Buy rating on the stock with a $19.00 price target.