MediaAlpha (NYSE:MAX – Get Free Report) and PaySign (NASDAQ:PAYS – Get Free Report) are both small-cap business services companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.
Profitability
This table compares MediaAlpha and PaySign’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| MediaAlpha | -16.12% | N/A | -26.10% |
| PaySign | 3.07% | 8.15% | 1.16% |
Risk & Volatility
MediaAlpha has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500. Comparatively, PaySign has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| MediaAlpha | $409.43 million | 1.25 | -$57.67 million | ($1.52) | -5.24 |
| PaySign | $38.03 million | 2.94 | $1.03 million | $0.03 | 70.69 |
PaySign has lower revenue, but higher earnings than MediaAlpha. MediaAlpha is trading at a lower price-to-earnings ratio than PaySign, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
68.2% of MediaAlpha shares are held by institutional investors. Comparatively, 19.4% of PaySign shares are held by institutional investors. 9.6% of MediaAlpha shares are held by company insiders. Comparatively, 23.4% of PaySign shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Analyst Ratings
This is a summary of recent ratings and price targets for MediaAlpha and PaySign, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| MediaAlpha | 1 | 1 | 3 | 0 | 2.40 |
| PaySign | 0 | 0 | 2 | 0 | 3.00 |
MediaAlpha presently has a consensus price target of $14.00, suggesting a potential upside of 75.66%. PaySign has a consensus price target of $4.67, suggesting a potential upside of 120.13%. Given PaySign’s stronger consensus rating and higher probable upside, analysts plainly believe PaySign is more favorable than MediaAlpha.
Summary
PaySign beats MediaAlpha on 10 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 PaySign
PaySign, Inc. provides prepaid card products and processing services under the PaySign brand for corporate, consumer, and government applications. It offers various services, such as transaction processing, cardholder enrollment, value loading, cardholder account management, reporting, and customer service through PaySign, a card processing platform. The company also develops prepaid card programs for corporate incentive and rewards, including consumer rebates, donor compensation, clinical trials, healthcare reimbursement payments, and pharmaceutical payment assistance; and payroll or general purpose reloadable cards, as well as gift or incentive cards. In addition, it offers Per Diem, Corporate Expense, and Business Travel Cards that allows businesses, and nonprofits and government agencies the ability to control employee spending while reducing administration costs by eliminating the need for traditional expense reports. Further, the company provides payment claims processing and other administrative services; pharmacy-based voucher and copay, and medical claims and debit-based affordability programs; PaySign Premier, a demand deposit account debit card; and payment solution for source plasma collection centers, as well as customer service center and PaySign Communications Suite services. Its principal target markets for processing services comprise prepaid card issuers, retail and private-label issuers, small third-party processors, and small and mid-size financial institutions in the United States and Mexico. The company was formerly known as 3PEA International, Inc. and changed its name to PaySign, Inc. in April 2019. PaySign, Inc. was incorporated in 1995 and is headquartered in Henderson, Nevada.
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