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MediaAlpha Inc. shares have touched a 52-week low, with the stock price plummeting to $7.81, reflecting a stark downturn in the company's market valuation to $430 million. InvestingPro analysis indicates the stock is currently undervalued, with analysts setting price targets between $13 and $23. This latest price level underscores a challenging period for the digital advertising firm, which has seen its stock price erode significantly over the past year. Despite the -56.56% decline over the past year, the company maintains strong fundamentals with impressive revenue growth of 123% and a healthy current ratio of 1.43. InvestingPro has identified 14 additional investment tips for MediaAlpha, including signals that the stock may be oversold, providing valuable insights for investors considering this opportunity.
In other recent news, MediaAlpha Inc. reported mixed financial results for the fourth quarter, which included an earnings per share (EPS) of $0.08, falling short of the $0.22 consensus estimate. However, the company's revenue exceeded expectations at $300.6 million, surpassing the projected $298.3 million, marking a 157% increase year-over-year. The transaction value also reached a record high of $499.2 million, driven by significant growth in the Property & Casualty (P&C) insurance sector. Despite these achievements, MediaAlpha's forward-looking guidance for the first quarter of 2025 projected revenue between $225 million and $245 million, below the consensus estimate of $268.6 million, indicating a potential slowdown.
Analysts have responded to these developments by adjusting their outlooks. Goldman Sachs reduced the price target for MediaAlpha shares from $23.00 to $14.00 but maintained a Buy rating, while Keefe, Bruyette & Woods cut the price target from $22.00 to $19.00, reaffirming an Outperform rating. These changes reflect concerns over the company's cautious guidance and ongoing challenges in its Health segment, which is currently under Federal Trade Commission (FTC) scrutiny. MediaAlpha has set aside a $7 million reserve related to this matter.
Additionally, MediaAlpha announced the appointment of Bradley Hunt, a health insurance veteran, to its Board of Directors, signaling a strategic move to enhance leadership. This appointment aligns with the company's efforts to sustain its market leadership and growth trajectory, particularly within the Medicare Advantage market. Despite the mixed results and cautious outlook, MediaAlpha's management remains optimistic about the long-term growth potential in the insurance digital advertising market.
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