American Well (NYSE:AMWL) & MediaAlpha (NYSE:MAX) Critical Analysis

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

Volatility and Risk

MediaAlpha has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, American Well has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for MediaAlpha and American Well, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MediaAlpha	0	1	6	0	2.86
American Well	0	3	1	0	2.25

MediaAlpha currently has a consensus price target of $21.57, suggesting a potential upside of 87.11%. American Well has a consensus price target of $12.50, suggesting a potential upside of 7.34%. Given MediaAlpha’s stronger consensus rating and higher probable upside, research analysts plainly believe MediaAlpha is more favorable than American Well.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MediaAlpha	$681.23 million	1.13	-$40.42 million	$0.17	67.82
American Well	$254.04 million	0.70	-$675.16 million	($14.63)	-0.80

MediaAlpha has higher revenue and earnings than American Well. American Well 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 MediaAlpha and American Well’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%
American Well	-84.27%	-52.49%	-40.22%

Insider and Institutional Ownership

64.4% of MediaAlpha shares are held by institutional investors. Comparatively, 56.0% of American Well shares are held by institutional investors. 11.5% of MediaAlpha shares are held by insiders. Comparatively, 12.8% of American Well shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

MediaAlpha beats American Well on 13 of the 14 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 American Well

American Well Corporation, an enterprise platform and software company, delivers digitally enabling hybrid care in the United States and internationally. The company offers Converge, a cloud-based platform that enables health providers, payers, and innovators to provide in-person, virtual and automated care; and delivers virtual primary care, post-discharge follow-up, chronic condition management, virtual nursing, e-sitting, on-demand and scheduled virtual visits, specialty consults, automated care, and behavioral health, as well as specialty care programs, including dermatology, musculoskeletal care, second opinion, and cardiometabolic care to patients and members. It provides Carepoint devices comprising carts, peripherals, tablets, and TVs, which serve as digital access points in clinical settings. In addition, the company offers Amwell Medical Group network services consisting of primary and urgent care, behavioral health therapy, acute psychiatry, lactation counseling, and nutrition services. Further, it provides professional services to facilitate implementation, workflow design, systems integration, and service expansion for its products, as well as patient and provider engagement services. The company sells its products through field sales professionals, channel partners, and value-added resellers. American Well Corporation was incorporated in 2006 and is headquartered in Boston, Massachusetts.