MediaAlpha (NYSE:MAX) versus MercadoLibre (NASDAQ:MELI) Critical Review

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

Institutional & Insider Ownership

64.4% of MediaAlpha shares are held by institutional investors. Comparatively, 87.6% of MercadoLibre shares are held by institutional investors. 13.4% of MediaAlpha shares are held by insiders. Comparatively, 0.3% of MercadoLibre shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

MediaAlpha has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500. Comparatively, MercadoLibre has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for MediaAlpha and MercadoLibre, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MediaAlpha	0	1	6	0	2.86
MercadoLibre	1	2	11	2	2.88

MediaAlpha presently has a consensus target price of $17.21, indicating a potential upside of 57.58%. MercadoLibre has a consensus target price of $2,632.50, indicating a potential upside of 7.24%. Given MediaAlpha’s higher probable upside, equities analysts plainly believe MediaAlpha is more favorable than MercadoLibre.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
MediaAlpha	1.41%	-11.98%	5.19%
MercadoLibre	9.20%	51.89%	9.29%

Valuation & Earnings

This table compares MediaAlpha and MercadoLibre”s revenue, earnings per share (EPS) 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
MercadoLibre	$22.38 billion	5.56	$987.00 million	$40.66	60.37

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

Summary

MercadoLibre beats MediaAlpha on 13 of the 15 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 MercadoLibre

MercadoLibre, Inc. operates online commerce platforms in the United States. It operates Mercado Libre Marketplace, an automated online commerce platform that enables businesses, merchants, and individuals to list merchandise and conduct sales and purchases digitally; and Mercado Pago FinTech platform, a financial technology solution platform, which facilitates transactions on and off its marketplaces by providing a mechanism that allows its users to send and receive payments online, as well as allows users to transfer money through their websites or on the apps. The company also offers Mercado Fondo that allows users to invest funds deposited in their Mercado Pago accounts; Mercado Credito, which extends loans to certain merchants and consumers; and Mercado Envios logistics solution that enables sellers on its platform to utilize third-party carriers and other logistics service providers, as well as fulfillment and warehousing services for sellers. In addition, it provides Mercado Libre Classifieds, an online classified listing service, where users can list and purchase motor vehicles, real estate, and services; Mercado Ads, an advertising platform, which enables large retailers and brands to promote their products and services on the web; and Mercado Shops, an online storefronts solution that enables users to set-up, manage, and promote their own digital stores. The company was incorporated in 1999 and is headquartered in Montevideo, Uruguay.