Marchex (MCHX) AI Stock Analysis

• Market Cap: $65.41M
• Dividend Yield: N/A
• Average Volume (3M): 41.34K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.20
• Revenue Growth: -3.58%
• EPS Growth: 50.73%
• Country: US
• Employees: 163
• Sector: Communication Services
• Sector Strength: 85
• Industry: Advertising Agencies
• EPS (TTM): -0.11
• Shares Outstanding: 39,240,803
• 10 Day Avg. Volume: 18,876
• 30 Day Avg. Volume: 41,337
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.68
• Price to Cash Flow (P/CF): 23.10
• P/FCF Ratio: 22.70
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 2.07
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $3.25
• Price Target Upside: 118.12% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Marchex’s stock is currently facing challenges with weak financial performance and bearish technical indicators. The negative P/E ratio and absence of dividends make it less attractive from a valuation perspective. While there is potential for future growth, as indicated in the earnings call and Q2 2023 results, the current financial and technical landscape overshadows these positives.

Positive Factors

Operational Leverage

The OneStack initiative aims to enhance customer acquisition and expand margins, potentially improving operational leverage over time.

Product Development

Marchex anticipates new product rollouts to lead to a return to growth, with better growth dependent on the success of go-to-market strategies.

Negative Factors

Financial Guidance

4Q guidance was slightly below projections, impacting short-term expectations.

Revenue Diversification

The timeline for the impact of the OneStack initiative remains uncertain, affecting revenue diversification into new verticals.

Marchex Business Overview & Revenue Model

Company Description

Marchex, Inc. operates as an analytics and solutions company that helps businesses connect, drive, measure, and convert callers into customers in the United States and Canada. Its products include Marchex Call Analytics, an analytics platform for enterprises, which depend on inbound phone calls to drive sales, appointments, and reservations; Marchex Call Analytics, Conversation Edition that enable actionable insights for enterprise, mid-sized, and small businesses; Text Analytics and Communications, a solution for intelligent mobile messaging, which enables sales, marketing, and operations teams in businesses to engage in two-way communications with field staff, prospects, and customers through text/SMS messages; Call Monitoring for call recording; and Marchex Marketing Edge, an analytics solution for marketers in enterprise, mid-sized and small businesses that depend on inbound phone calls to drive sales, appointments and reservations. The company's Marchex Sales Engagement products comprise Marchex Engage, which combines Marchex artificial intelligence and machine learning with call monitoring and scoring services; Marchex Spotlight, a product for corporate and regional managers; Marchex Engage for Automotive; and Marchex Platform Services that allows businesses to add Marchex conversation intelligence to their existing workflows and enabling them to decode what happens in their conversations with customers. Marchex, Inc. was incorporated in 2003 and is headquartered in Seattle, Washington.

How the Company Makes Money

Marchex makes money by offering subscription-based services and software solutions to businesses. The company's primary revenue streams include fees from its call analytics and tracking services, which help businesses gain insights into phone call interactions with customers. These services allow businesses to measure the effectiveness of their advertising campaigns by tracking which marketing channels drive phone calls. Marchex also generates revenue through its conversational intelligence products, which analyze call data to provide actionable insights for improving customer engagement and sales strategies. Partnerships with marketing agencies and resellers also play a role in expanding its reach and customer base, contributing to its overall earnings.

Marchex Financial Statement Overview

Summary

Marchex faces significant financial challenges, with consistent losses and declining revenues. The company's low leverage provides some stability, but negative cash flows and profitability issues are critical concerns. The firm needs to enhance operational efficiency and revenue growth to improve its financial health.

Income Statement

Marchex shows a declining revenue trend with a noticeable drop over the years. The gross profit margin remains stable, but negative EBIT and net income margins indicate ongoing profitability challenges. The company has not achieved positive net income in recent years, reflecting pressure on profitability and potential operational inefficiencies.

Balance Sheet

The balance sheet displays a positive equity position, suggesting financial stability. The debt-to-equity ratio is low, indicating minimal leverage and reduced financial risk. However, the declining stockholder's equity and total assets suggest potential pressure on long-term financial health.

Cash Flow

Marchex's cash flow statements reveal persistent negative operating and free cash flow, highlighting liquidity challenges. The free cash flow to net income ratio is negative, pointing to potential cash generation issues. The lack of positive cash flows raises concerns about the company's ability to sustain operations without external financing.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
48.12M	49.91M	52.17M	53.48M	51.22M
	Gross Profit
30.95M	29.33M	31.71M	31.78M	30.33M
	EBIT
-4.45M	-9.64M	-8.07M	-11.65M	-25.45M
	EBITDA
-4.45M	-5.76M	-4.03M	2.22M	-36.18M
	Net Income Common Stockholders
-4.95M	-9.91M	-8.24M	-4.39M	-42.99M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
12.77M	14.61M	20.47M	27.09M	33.85M
	Total Assets
43.20M	47.48M	56.79M	65.83M	77.73M
	Total Debt
1.22M	2.10M	1.64M	3.26M	9.91M
	Net Debt
-11.55M	-12.51M	-18.84M	-23.83M	-23.94M
	Total Liabilities
10.57M	11.61M	12.68M	14.32M	25.05M
	Stockholders Equity
32.63M	35.87M	44.11M	51.50M	52.69M
Cash Flow		Free Cash Flow
-1.53M	-5.77M	-5.16M	-7.69M	-4.73M
	Operating Cash Flow
-1.10M	-4.39M	-2.29M	-6.34M	-3.37M
	Investing Cash Flow
-429.00K	-1.31M	-2.87M	-951.00K	981.00K
	Financing Cash Flow
-307.00K	-160.00K	-1.46M	528.00K	-5.49M

Marchex Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1.49
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MCHX, the sentiment is Neutral. The current price of 1.49 is above the 20-day moving average (MA) of 1.45, below the 50-day MA of 1.74, and below the 200-day MA of 1.82, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 45.35 is Neutral, neither overbought nor oversold. The STOCH value of 52.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MCHX.

Marchex Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	59 Neutral	$13.69B	6.83	-3.38%	3.82%	2.32%	-34.61%
WIMI	53 Neutral	$49.69M	9.96	8.21%	―	-8.74%	―
INUV	51 Neutral	$57.65M	―	-37.84%	―	13.37%	50.36%
FLNT	42 Neutral	$45.42M	―	-98.64%	―	-14.67%	59.39%
HHS	42 Neutral	$34.27M	―	-145.85%	―	-3.26%	-1829.89%
CDLX	41 Neutral	$78.78M	―	-184.87%	―	-10.00%	-11.58%
MCHX	38 Underperform	$65.41M	―	-14.44%	―	-3.58%	50.73%

Marchex Corporate Events

Marchex Reports Strong Q2 2023 Financial Results

Marchex has announced its financial results for the second quarter of 2023, highlighting a revenue increase driven by strong demand for its call analytics solutions. The company reported a net income improvement compared to the previous year, reflecting effective cost management and operational efficiencies. This financial performance underscores Marchex’s competitive positioning in the call analytics industry and suggests positive implications for its stakeholders.