The Surge Following a BMO Endorsement

MediaAlpha (NYSE:MAX) experienced a significant surge of 9% during Monday midafternoon trading. This propelled its year-to-date gains to an impressive 94.3% after BMO Capital Markets upgraded the insurance customer acquisition platform from Market Perform to a notable Outperform rating.

Analyst Outlook and Projections

Analyst Michael Zaremski foresees a potential upswing in transaction value beginning this year. He anticipates that auto insurers will ramp up their “advertising-for-growth spend beyond sell-side expectations,” as mentioned in a recent note. Zaremski’s 2025 estimate for P&C-related transaction value stands at $807 million, which exceeds MediaAlpha’s (MAX) peak level in 2021 by over 20%.

Reworked Price Target and Ratings

Zaremski has adjusted his price target for MAX to $28, up from the previous $9. This revision is based on a ~25.6x 2025 estimated EV/adjusted EBITDA multiple. The heightened target price reflects the anticipation of ongoing beat-and-raises in Transaction Value + Adjusted EBITDA for the upcoming quarters and the double-digit long-term growth prospects within the direct-to-consumer sphere where MAX operates. This positive outlook is slightly dampened by MAX’s somewhat less stable and predictable growth and EBITDA profile.

Varied Ratings Landscape

While BMO’s upgrade signifies an “Outperform” status, it diverges from the SA Quant system’s rating of Hold but aligns with the average Wall Street analyst rating of Buy.