Back to top

Image: Bigstock

Is MediaAlpha (MAX) Stock Undervalued Right Now?

Read MoreHide Full Article

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is MediaAlpha (MAX - Free Report) . MAX is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 14.57, while its industry has an average P/E of 23.86. MAX's Forward P/E has been as high as 389.79 and as low as 9.72, with a median of 15.10, all within the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. MAX has a P/S ratio of 0.72. This compares to its industry's average P/S of 1.96.

Finally, investors will want to recognize that MAX has a P/CF ratio of 25.82. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 56.38. Over the past year, MAX's P/CF has been as high as 66.13 and as low as -172.80, with a median of 25.12.

These figures are just a handful of the metrics value investors tend to look at, but they help show that MediaAlpha is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MAX feels like a great value stock at the moment.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


MediaAlpha, Inc. (MAX) - free report >>

Published in