Why MEDIAALPHA INC-CLASS A (NYSE:MAX) Fits Louis Navellier’s High-Growth Stock Criteria

Louis Navellier’s The Little Book That Makes You Rich presents an eight-rule system for finding high-growth stocks with solid earnings momentum, better profitability, and strong fundamentals. The approach targets companies showing rising earnings revisions, frequent earnings surprises, faster sales and earnings growth, wider margins, healthy cash flow, and high returns on equity. These factors help identify stocks likely to perform well over time by taking advantage of Wall Street’s tendency to underestimate their growth potential.

One stock that fits this approach is MEDIAALPHA INC-CLASS A (NYSE:MAX), a marketing technology firm focused on data-driven customer acquisition in the insurance sector. Below, we review how MAX matches Navellier’s key screening factors and why it stands as a strong pick for growth-focused investors.

How MAX Matches the Little Book Criteria

1. Higher Earnings Revisions
   Analysts have increased EPS estimates for MAX’s next quarter by 30.93% over the last three months, showing greater confidence in short-term earnings. This fits Navellier’s focus on rising revisions as a sign of earnings momentum.

2. Better-Than-Expected Earnings
   MAX has exceeded EPS estimates in three of the last four quarters, with an average surprise of 244.51%. This consistent outperformance indicates the company is performing well above forecasts, a key part of Navellier’s strategy.

3. Rising Sales Growth
   Revenue growth has been strong, with year-over-year (TTM) sales up 148.59% and quarter-over-quarter growth of 108.69%. Faster top-line growth is important for growth investors, as it often leads to wider margins and faster earnings growth.

4. Wider Operating Margins
   MAX’s operating margin has jumped 192.32% over the past year, showing better cost control alongside fast revenue growth. Navellier points to expanding margins as a sign of scalable profitability.

5. Healthy Cash Flow
   Free cash flow growth of 105.87% year-over-year highlights MAX’s ability to turn earnings into cash—a key measure of financial strength and sustainable growth.

6. Earnings Growth
   EPS growth has been impressive, with year-over-year (TTM) growth of 177.94% and quarter-over-quarter growth of 1,150%. This momentum is central to Navellier’s system, as it often leads to higher revisions and stock price gains.

7. Stronger Earnings Momentum
   The jump in EPS growth (from 91.30% in the prior comparable quarter to 1,150% recently) signals improving profitability—a positive sign for momentum investors.

8. High Return on Equity (ROE)
   MAX’s ROE of 199.44% is outstanding, showing efficient use of shareholder capital. Navellier values high ROE as a sign of competitive strength and lasting growth.

Key Fundamental Data

ChartMill’s fundamental analysis report gives MAX a rating of 5/10, noting its strong growth metrics alongside mixed profitability and debt trends. Key points include:

• Profitability: High ROE and ROIC, but falling gross margins.
• Valuation: Fair forward P/E (11.20) compared to industry peers.
• Financial Health: Good solvency (Altman-Z score: 4.23) but higher debt/equity (19.12).
• Growth Outlook: Expected EPS growth of 46.29% annually in the coming years.

Next Steps for Investors

MAX represents the kind of high-momentum, high-growth stock Navellier’s system aims to find. For investors looking for similar opportunities, the pre-configured Little Book screener lists other stocks meeting these strict criteria.

Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Investors should conduct their own research before making any financial decisions.