Analyzing MediaAlpha (NYSE:MAX) and Nextdoor (NYSE:NXDR)

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

Insider and Institutional Ownership

35.7% of Nextdoor shares are owned by institutional investors. Comparatively, 64.4% of MediaAlpha shares are owned by institutional investors. 33.5% of Nextdoor shares are owned by company insiders. Comparatively, 14.6% of MediaAlpha shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nextdoor	$257.65 million	3.32	-$54.20 million	($0.08)	-28.00
MediaAlpha	$1.11 billion	0.66	$25.62 million	$1.62	7.42

MediaAlpha has higher revenue and earnings than Nextdoor. Nextdoor 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 Nextdoor and MediaAlpha’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nextdoor	-11.08%	-6.16%	-5.45%
MediaAlpha	7.94%	-301.42%	28.23%

Volatility & Risk

Nextdoor has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500. Comparatively, MediaAlpha has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Nextdoor and MediaAlpha, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nextdoor	1	2	1	0	2.00
MediaAlpha	0	5	3	1	2.56

Nextdoor presently has a consensus target price of $2.80, suggesting a potential upside of 25.00%. MediaAlpha has a consensus target price of $14.29, suggesting a potential upside of 18.85%. Given Nextdoor’s higher probable upside, research analysts clearly believe Nextdoor is more favorable than MediaAlpha.

Summary

MediaAlpha beats Nextdoor on 10 of the 15 factors compared between the two stocks.

About Nextdoor

Nextdoor Holdings, Inc. operates as the neighborhood network that connects neighbors, businesses, and public services in the United States and internationally. It enables small and mid-sized businesses, large brands, public agencies, and nonprofits to receive information, give and get help, and build connections. The company is headquartered in San Francisco, 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.