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Marchex (MCHX)
NASDAQ:MCHX

Marchex (MCHX) AI Stock Analysis

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Marchex

(NASDAQ:MCHX)

Rating:61Neutral
Price Target:
$2.00
▼(-6.10%Downside)
The overall stock score reflects a company with strong technical momentum and positive future guidance from the earnings call. However, the financial performance is hindered by profitability and cash flow challenges, which weigh down the score. Valuation metrics further underscore concerns regarding profitability and growth prospects.
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 (MCHX) vs. SPDR S&P 500 ETF (SPY)

Marchex Business Overview & Revenue Model

Company DescriptionMarchex, 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 MoneyMarchex generates revenue through its suite of conversational analytics products and services. Primarily, the company earns money by offering subscription-based access to its analytics platform, which includes features like call tracking, keyword spotting, and conversation analytics. Businesses subscribe to these services to gain insights into customer interactions, which can inform marketing strategies and optimize customer service operations. Additionally, Marchex may generate revenue through partnerships and integrations with other technology platforms, enhancing the value of its offerings and expanding its customer base.

Marchex Earnings Call Summary

Earnings Call Date:May 13, 2025
(Q1-2025)
|
% Change Since: 46.90%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call highlights Marchex's successful strategic transformation and technological advancements, along with promising new product launches and strong future financial guidance. However, there are concerns about the current revenue impacts due to seasonal factors and broader economic uncertainties.
Q1-2025 Updates
Positive Updates
Successful Transformation into SaaS-Based Prescriptive Analytics Provider
Marchex has completed its two-year strategic transformation into a SaaS-based prescriptive analytics provider powered by AI and proprietary first-party conversational data.
OneStack Platform Unification
The unification of Marchex's technology stack into the OneStack platform has centralized data and improved gross margins by approximately 8% compared to Q1 2023.
Launch of AI-Driven Products
New AI-powered products like 'Engage for Sales' and 'Engage for Service' have been launched, targeting new multimillion-dollar opportunities in the auto industry.
Expansion into Microsoft Marketplace
Marchex has expanded its reach by launching its first product in the Microsoft Marketplace, allowing global access via Azure.
Financial Guidance for 2025
The company anticipates achieving over $12.5 million in quarterly revenue by the end of 2025, with an annualized revenue run rate of $50 million or better.
New Share Repurchase Program
Marchex announced a new share repurchase program, reflecting confidence in its financial position and future growth.
Negative Updates
Seasonal and Timing Impacts on Revenue
First quarter revenue was affected by seasonal call traffic and the timing of new sales, impacting the current financial performance.
Macro-Economic Uncertainty
The company acknowledges potential risks due to macro-economic factors that could impact customer behavior and financial performance variability.
Company Guidance
During the first quarter 2025 earnings call, Marchex provided optimistic guidance for the fiscal year, anticipating a significant increase in revenue and profitability. The company reported first-quarter revenue of $11.4 million and projected an annualized revenue run rate of over $50 million by the end of 2025. Marchex expects quarterly revenue to exceed $12.5 million, with quarterly adjusted EBITDA surpassing $1.5 million, leading to an annualized adjusted EBITDA of $6 million. The company's strategic transformation, marked by the consolidation of its technology stack into the OneStack platform, has already contributed to an 8% increase in gross margin compared to the first quarter of 2023. Despite potential macroeconomic uncertainties, Marchex is poised for growth through the introduction of AI-driven solutions, expanded sales channels, and deeper penetration into high-value verticals such as Auto, Auto Services, Home Services, and Healthcare. The company also highlighted the adoption of a new share repurchase program and the sale of an unused domain as part of its financial strategy.

Marchex Financial Statement Overview

Summary
Marchex displays a mixed financial position with strong cost management evident in gross margins, but persistent challenges in revenue growth and profitability. The low debt levels provide some stability; however, recurring losses and negative cash flows pose risks, requiring strategic improvements to enhance financial health.
Income Statement
45
Neutral
The income statement shows declining revenues, with a revenue decrease of 4.3% from 2023 to the TTM period. Gross Profit Margin stands at 64.0% in TTM, indicating strong cost management. However, the company faces challenges with profitability as both EBIT and Net Profit Margins are negative, at -10.4% and -11.4% respectively, reflecting continued operational losses.
Balance Sheet
50
Neutral
The balance sheet reflects a stable equity position with a Debt-to-Equity Ratio of 0.03, indicating low financial leverage. However, the continuous decline in equity and total assets over the years could be a concern. The Equity Ratio for TTM is 77.2%, showing a strong equity base, but the negative net income impacts Return on Equity, which remains negative.
Cash Flow
40
Negative
Cash flow analysis shows negative operating and free cash flows, indicating potential liquidity issues. The Operating Cash Flow to Net Income Ratio is 0.23 for TTM, suggesting efficiency challenges in converting income into cash. The Free Cash Flow to Net Income Ratio is -0.31, further highlighting cash generation difficulties relative to net losses.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue47.95M48.12M49.91M52.17M53.48M51.22M
Gross Profit30.70M30.95M29.33M31.71M31.78M30.33M
EBITDA-3.20M-1.80M-5.76M-4.03M2.22M-36.18M
Net Income-5.48M-4.95M-9.91M-8.24M-4.39M-42.99M
Balance Sheet
Total Assets40.63M43.20M47.48M56.79M65.83M77.73M
Cash, Cash Equivalents and Short-Term Investments10.02M12.77M14.61M20.47M27.09M33.85M
Total Debt1.10M1.22M2.10M1.64M3.26M9.91M
Total Liabilities9.26M10.57M11.61M12.68M14.32M25.05M
Stockholders Equity31.37M32.63M35.87M44.11M51.50M52.69M
Cash Flow
Free Cash Flow-1.67M-1.53M-5.77M-5.16M-7.69M-4.73M
Operating Cash Flow-1.25M-1.10M-4.39M-2.29M-6.34M-3.37M
Investing Cash Flow-714.00K-429.00K-1.31M-2.87M-951.00K981.00K
Financing Cash Flow-50.00K-307.00K-160.00K-1.46M528.00K-5.49M

Marchex Technical Analysis

Technical Analysis Sentiment
Positive
Last Price2.13
Price Trends
50DMA
1.74
Positive
100DMA
1.76
Positive
200DMA
1.81
Positive
Market Momentum
MACD
0.12
Positive
RSI
64.27
Neutral
STOCH
50.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MCHX, the sentiment is Positive. The current price of 2.13 is above the 20-day moving average (MA) of 2.03, above the 50-day MA of 1.74, and above the 200-day MA of 1.81, indicating a bullish trend. The MACD of 0.12 indicates Positive momentum. The RSI at 64.27 is Neutral, neither overbought nor oversold. The STOCH value of 50.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MCHX.

Marchex Risk Analysis

Marchex disclosed 32 risk factors in its most recent earnings report. Marchex reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Marchex Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
61
Neutral
$41.24B-0.79-14.21%3.80%2.39%-73.52%
61
Neutral
$93.51M-16.55%-2.67%21.65%
59
Neutral
$71.53M-34.39%18.20%50.08%
54
Neutral
$28.19M5.658.21%-8.74%
HHHHS
45
Neutral
$29.09M-147.49%-4.46%-3053.30%
42
Neutral
$94.50M-135.48%-12.77%19.71%
41
Neutral
$38.86M-123.16%-15.07%33.40%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MCHX
Marchex
2.13
0.71
50.00%
HHS
Harte-Hanks
3.68
-5.07
-57.94%
INUV
Inuvo
4.95
2.33
88.93%
FLNT
Fluent
2.02
-1.54
-43.26%
CDLX
Cardlytics
1.86
-6.35
-77.34%
WIMI
WiMi Hologram Cloud
2.87
-6.13
-68.11%

Marchex Corporate Events

Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Marchex Launches New Share Repurchase Program
Neutral
May 13, 2025

Marchex announced a new share repurchase program to buy back up to 3 million shares of its Class B common stock, replacing previous programs. The company reported its financial results for the first quarter of 2025, showing a slight decrease in revenue and an increased net loss compared to the previous year. Despite these results, Marchex is optimistic about future growth, highlighting strategic milestones in its transformation into an AI-powered prescriptive analytics leader. The company is expanding its product platform and increasing investments in sales and marketing to support growth, while leveraging its first-party data for enhanced customer insights. Marchex also sold a domain asset for $0.8 million and expanded its auto vertical OEM sales channel, expecting these initiatives to improve financial performance and market positioning.

The most recent analyst rating on (MCHX) stock is a Buy with a $2.50 price target. To see the full list of analyst forecasts on Marchex stock, see the MCHX Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 21, 2025