Reviewing Advantage Solutions (NASDAQ:ADV) & MediaAlpha (NYSE:MAX)

MediaAlpha (NYSE:MAX) and Advantage Solutions (NASDAQ:ADV) are both small-cap business services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, earnings, institutional ownership, profitability, risk, dividends and analyst recommendations.

Earnings & Valuation

This table compares MediaAlpha and Advantage Solutions”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MediaAlpha	$1.00 billion	0.73	-$40.42 million	$0.28	39.01
Advantage Solutions	$3.53 billion	0.14	-$63.26 million	($1.16)	-1.34

MediaAlpha has higher earnings, but lower revenue than Advantage Solutions. Advantage Solutions is trading at a lower price-to-earnings ratio than MediaAlpha, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and recommmendations for MediaAlpha and Advantage Solutions, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MediaAlpha	0	1	6	0	2.86
Advantage Solutions	0	0	1	0	3.00

MediaAlpha currently has a consensus target price of $17.21, suggesting a potential upside of 57.58%. Advantage Solutions has a consensus target price of $2.25, suggesting a potential upside of 45.16%. Given MediaAlpha’s higher possible upside, equities analysts clearly believe MediaAlpha is more favorable than Advantage Solutions.

Insider and Institutional Ownership

64.4% of MediaAlpha shares are held by institutional investors. Comparatively, 49.8% of Advantage Solutions shares are held by institutional investors. 13.4% of MediaAlpha shares are held by insiders. Comparatively, 6.2% of Advantage Solutions shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares MediaAlpha and Advantage Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MediaAlpha	1.41%	-11.98%	5.19%
Advantage Solutions	-3.32%	-7.58%	-2.17%

Volatility & Risk

MediaAlpha has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500. Comparatively, Advantage Solutions has a beta of 2.02, suggesting that its share price is 102% more volatile than the S&P 500.

Summary

MediaAlpha beats Advantage Solutions on 10 of the 14 factors compared between the two stocks.

About MediaAlpha

MediaAlpha, Inc., through its subsidiaries, operates an insurance customer acquisition platform in the United States. It optimizes customer acquisition in various verticals of property and casualty insurance, health insurance, and life insurance. The company was founded in 2014 and is headquartered in Los Angeles, California.

About Advantage Solutions

Advantage Solutions Inc. provides business solutions to consumer goods manufacturers and retailers in North America and internationally. It operates in two segments, Sales and Marketing. The Sales segment offers brand-centric services, such as headquarter relationship management; analytics, insights, and intelligence; and brand-centric merchandising services. This segment also provides retailer-centric services comprising retailer-centric merchandising and in-store media services. The Marketing segment offers brand-centric services, including shopper and consumer marketing, and brand experiential services; retailer-centric services, such as retail experiential and private label services; and digital marketing, and digital media and advertising services. The company was formerly known as Karman Holding Corp. and changed its name to Advantage Solutions Inc. in March 2016. The company was founded in 1987 and is headquartered in Irvine, California.