Insurance customer acquisition platform MediaAlpha (NYSE: MAX) fell short of the market’s revenue expectations in Q4 CY2025, with sales falling 3.2% year on year to $291.2 million. On the other hand, next quarter’s outlook exceeded expectations with revenue guided to $295 million at the midpoint, or 4.9% above analysts’ estimates. Its GAAP profit of $0.50 per share was significantly above analysts’ consensus estimates.

Is now the time to buy MediaAlpha? Find out by accessing our full research report, it’s free.

“2025 was a record year for MediaAlpha, driven by strong momentum in P&C and continued market share gains, reinforcing our role as the leading customer acquisition infrastructure for insurance carriers.” said MediaAlpha co-founder and CEO Steve Yi.

Company Overview

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.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.

With $1.11 billion in revenue over the past 12 months, MediaAlpha is a small player in the business services space, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and numerous distribution channels. On the bright side, it can grow faster because it has more room to expand.

As you can see below, MediaAlpha’s sales grew at an exceptional 13.7% compounded annual growth rate over the last five years. This is a great starting point for our analysis because it shows MediaAlpha’s demand was higher than many business services companies.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. MediaAlpha’s annualized revenue growth of 69.4% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, MediaAlpha missed Wall Street’s estimates and reported a rather uninspiring 3.2% year-on-year revenue decline, generating $291.2 million of revenue. Company management is currently guiding for a 11.6% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 10% over the next 12 months, a deceleration versus the last two years. Still, this projection is healthy and implies the market sees success for its products and services.

Microsoft, Alphabet, Coca-Cola, Monster Beverage—all began as under-the-radar growth stories riding a massive trend. We’ve identified the next one: a profitable AI semiconductor play Wall Street is still overlooking. Go here for access to our full report.

Operating Margin

MediaAlpha was roughly breakeven when averaging the last five years of quarterly operating profits, one of the worst outcomes in the business services sector.

On the plus side, MediaAlpha’s operating margin rose by 1.6 percentage points over the last five years, as its sales growth gave it operating leverage.

In Q4, MediaAlpha generated an operating margin profit margin of 7.7%, up 1.6 percentage points year on year. This increase was a welcome development, especially since its revenue fell, showing it was more efficient because it scaled down its expenses.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

MediaAlpha’s EPS grew at an astounding 15.9% compounded annual growth rate over the last five years, higher than its 13.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into MediaAlpha’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, MediaAlpha’s operating margin expanded by 1.6 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For MediaAlpha, its two-year annual EPS growth of 56.3% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q4, MediaAlpha reported EPS of $0.50, up from $0.08 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects MediaAlpha’s full-year EPS of $0.39 to grow 139%.

Key Takeaways from MediaAlpha’s Q4 Results

It was good to see MediaAlpha beat analysts’ EPS expectations this quarter. We were also glad its revenue guidance for next quarter trumped Wall Street’s estimates. On the other hand, its revenue missed. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 8.2% to $8.40 immediately after reporting.

Sure, MediaAlpha had a solid quarter, but if we look at the bigger picture, is this stock a buy? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).