Earnings Miss: MediaAlpha, Inc. Missed EPS And Analysts Are Revising Their Forecasts

It's been a pretty great week for MediaAlpha, Inc. (NYSE:MAX) shareholders, with its shares surging 16% to US$60.80 in the week since its latest full-year results. It was a pretty negative result overall, with revenues of US$521m missing analyst predictions by 6.8%. Worse, the business reported a statutory loss of US$0.14 per share, a substantial decline on analyst expectations of a profit. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for MediaAlpha

Taking into account the latest results, the most recent consensus for MediaAlpha from five analysts is for revenues of US$712.3m in 2021 which, if met, would be a sizeable 37% increase on its sales over the past 12 months. Statutory earnings per share are expected to tumble 100% to US$0.07 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$712.3m and earnings per share (EPS) of US$0.07 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The consensus price target rose 21% to US$54.00despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of MediaAlpha's earnings by assigning a price premium. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic MediaAlpha analyst has a price target of US$54.00 per share, while the most pessimistic values it at US$38.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2021 brings more of the same, according to the analysts, with revenue forecast to display 37% growth on an annualised basis. That is in line with its 37% annual growth over the past year. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 16% annually. So it's pretty clear that MediaAlpha is forecast to grow substantially faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on MediaAlpha. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for MediaAlpha going out to 2025, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for MediaAlpha (1 is a bit concerning) you should be aware of.

If you’re looking to trade MediaAlpha, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.