MediaAlpha (NYSE:MAX) and Amplitude (NASDAQ:AMPL) Critical Analysis

Amplitude (NASDAQ:AMPL) and MediaAlpha (NYSE:MAX) are both small-cap business services companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Valuation and Earnings

This table compares Amplitude and MediaAlpha”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amplitude	$356.75 million	2.00	-$88.54 million	($0.67)	-10.27
MediaAlpha	$1.11 billion	0.48	$25.62 million	$0.64	13.48

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

Volatility & Risk

Amplitude has a beta of 1.43, indicating that its stock price is 43% more volatile than the S&P 500. Comparatively, MediaAlpha has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500.

Insider and Institutional Ownership

73.2% of Amplitude shares are held by institutional investors. Comparatively, 64.4% of MediaAlpha shares are held by institutional investors. 21.6% of Amplitude shares are held by insiders. Comparatively, 14.7% of MediaAlpha shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Amplitude and MediaAlpha’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Amplitude	-25.11%	-34.98%	-20.46%
MediaAlpha	3.37%	-147.82%	21.12%

Analyst Ratings

This is a summary of current recommendations and price targets for Amplitude and MediaAlpha, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amplitude	1	1	9	0	2.73
MediaAlpha	1	2	4	0	2.43

Amplitude currently has a consensus target price of $12.44, indicating a potential upside of 80.88%. MediaAlpha has a consensus target price of $12.90, indicating a potential upside of 49.50%. Given Amplitude’s stronger consensus rating and higher possible upside, analysts clearly believe Amplitude is more favorable than MediaAlpha.

Summary

Amplitude beats MediaAlpha on 8 of the 14 factors compared between the two stocks.

About Amplitude

Amplitude, Inc., together with its subsidiaries, provides a digital analytics platform that analyzes customer behavior in the United States and internationally. It offers Amplitude Analytics, which provides real-time product data and reconstructed user visits; Amplitude Experiment, a solution that allows teams to test new capabilities and safely roll out new features; Amplitude CDP, an insight-driven solution that encompasses the data infrastructure, audience management, and data streaming capabilities; and Amplitude Session Replay used by product, marketing, and data teams to understand user behavior, diagnose product issues, and improve product outcomes. The company also provides customer support services related to initial implementation setup, ongoing support, and application training. It delivers its application over the Internet as a subscription service using a software-as-a-service model. The company was formerly known as Sonalight, Inc. and changed its name to Amplitude, Inc. in December 2014. Amplitude, Inc. was incorporated in 2011 and is headquartered in San Francisco, California.

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.