Since August 2025, MediaAlpha has been in a holding pattern, posting a small loss of 2.4% while floating around $10.23. The stock also fell short of the S&P 500’s 10% gain during that period.
Given the weaker price action, is now a good time to buy MAX? Or should investors expect a bumpy road ahead? Find out in our full research report, it’s free.
Why Is MAX a Good Business?
Powering nearly 10 million consumer referrals each month in the insurance marketplace, MediaAlpha (NYSE: MAX) operates a technology platform that connects insurance carriers with high-intent consumers shopping for property, casualty, health, and life insurance products.
1. Skyrocketing Revenue Shows Strong Momentum
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, MediaAlpha’s sales grew at an incredible 16.6% compounded annual growth rate over the last five years. Its growth surpassed the average business services company and shows its offerings resonate with customers.
2. Increasing Free Cash Flow Margin Juices Financials
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
As you can see below, MediaAlpha’s margin expanded by 5.1 percentage points over the last five years. This is encouraging, and we can see it became a less capital-intensive business because its free cash flow profitability rose while its operating profitability fell. MediaAlpha’s free cash flow margin for the trailing 12 months was 7.8%.
3. New Investments Bear Fruit as ROIC Jumps
ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).
We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Fortunately, MediaAlpha’s ROIC has increased significantly over the last few years. This is a great sign when paired with its already strong returns. It could suggest its competitive advantage or profitable growth opportunities are expanding.
Final Judgment
These are just a few reasons why we think MediaAlpha is one of the best business services companies out there. With its shares trailing the market in recent months, the stock trades at 8.5× forward P/E (or $10.23 per share). Is now the time to initiate a position? See for yourself in our full research report, it’s free.
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