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

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

Analyst Ratings

This is a summary of recent ratings and price targets for Advantage Solutions and MediaAlpha, as provided by MarketBeat.

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

Advantage Solutions currently has a consensus target price of $2.25, indicating a potential upside of 38.04%. MediaAlpha has a consensus target price of $17.21, indicating a potential upside of 61.86%. Given MediaAlpha’s higher probable upside, analysts plainly believe MediaAlpha is more favorable than Advantage Solutions.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Advantage Solutions	$3.57 billion	0.15	-$326.96 million	($1.16)	-1.41
MediaAlpha	$864.70 million	0.82	$16.63 million	$0.28	37.98

MediaAlpha has lower revenue, but higher earnings 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Advantage Solutions	-10.71%	-33.99%	-8.76%
MediaAlpha	1.58%	-46.92%	11.27%

Risk & Volatility

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

Insider and Institutional Ownership

49.8% of Advantage Solutions shares are owned by institutional investors. Comparatively, 64.4% of MediaAlpha shares are owned by institutional investors. 6.2% of Advantage Solutions shares are owned by insiders. Comparatively, 13.4% of MediaAlpha shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

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

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.

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.