Marchex (MCHX) AI Stock Analysis

• Market Cap: $85.27M
• Dividend Yield: N/A
• Average Volume (3M): 23.53K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.23
• Revenue Growth: -2.64%
• EPS Growth: 6.48%
• Country: US
• Employees: 163
• Sector: Communication Services
• Sector Strength: 97
• Industry: Advertising Agencies
• EPS (TTM): 0.02
• Shares Outstanding: 39,518,050
• 10 Day Avg. Volume: 26,481
• 30 Day Avg. Volume: 23,533
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 2.02
• Enterprise Value/Gross Profit: 3.15
• Enterprise Value/Ebitda: -30.24
• 1Y Price Target: $3.00
• Price Target Upside: 63.93% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 44 Neutral
• Price Target: $2.00 ▲(9.29% Upside)

Marchex's overall stock score is primarily impacted by its financial performance and technical analysis, both of which indicate significant challenges. The company's strategic initiatives and partnerships provide some optimism, but anticipated revenue declines and negative valuation metrics weigh heavily on the score.

Positive Factors

Strong Cost Management

A high gross profit margin indicates effective cost management, which can sustain profitability even amidst revenue challenges.

New Product Launch

The new platform can enhance customer engagement and drive growth by leveraging AI, positioning Marchex for future market expansion.

Partnership Expansion

Expanding partnerships with large companies increases market reach and revenue potential, strengthening Marchex's competitive position.

Negative Factors

Declining Revenues

Continued revenue decline can limit growth opportunities and impact long-term financial stability, necessitating strategic adjustments.

Negative Cash Flows

Negative cash flows indicate liquidity issues, which can constrain operational flexibility and investment in growth initiatives.

Customer Migration Challenges

Challenges in transitioning customers to new platforms can disrupt revenue streams and affect customer retention, impacting growth.

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 generates revenue through its suite of call analytics and advertising solutions. The primary revenue model is based on a subscription and usage-based pricing structure for its analytics services, where clients pay for access to detailed reports and insights on customer calls. Additionally, Marchex earns revenue from its digital advertising services, where it partners with businesses to optimize their ad placements and performance based on call data. Significant partnerships with major advertising platforms and agencies enhance its market reach and contribute to its earnings, as they leverage Marchex's technology to improve the effectiveness of their campaigns.

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

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	47.95M	48.12M	49.91M	52.17M	53.48M	51.22M
Gross Profit	30.70M	30.95M	29.33M	31.71M	31.78M	30.33M
EBITDA	-3.20M	-1.80M	-5.76M	-4.03M	-5.68M	-36.66M
Net Income	-5.48M	-4.95M	-9.91M	-8.24M	-4.39M	-38.45M
Balance Sheet
Total Assets	40.63M	43.20M	47.48M	56.79M	65.83M	77.73M
Cash, Cash Equivalents and Short-Term Investments	10.02M	12.77M	14.61M	20.47M	27.09M	33.85M
Total Debt	1.10M	1.22M	2.10M	1.64M	3.26M	10.09M
Total Liabilities	9.26M	10.57M	11.61M	12.68M	14.32M	25.05M
Stockholders Equity	31.37M	32.63M	35.87M	44.11M	51.50M	52.69M
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	-951.00K	981.00K
Financing Cash Flow	-50.00K	-307.00K	-160.00K	-1.46M	528.00K	-5.49M

Marchex Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.83
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MCHX, the sentiment is Negative. The current price of 1.83 is below the 20-day moving average (MA) of 1.95, below the 50-day MA of 1.98, and below the 200-day MA of 1.87, indicating a bearish trend. The MACD of -0.03 indicates Positive momentum. The RSI at 35.79 is Neutral, neither overbought nor oversold. The STOCH value of 37.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MCHX.

Marchex Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WIMI	60 Neutral	46.65M	9.06	7.17%	―	-8.74%	―
INUV	46 Neutral	61.01M	-12.09	-38.61%	―	21.45%	41.21%
HHS	45 Neutral	26.77M	-8.92	-13.57%	―	-6.49%	89.87%
FLNT	45 Neutral	59.27M	-1.53	-140.49%	―	-12.84%	63.95%
MCHX	44 Neutral	$85.27M	―	-13.93%	―	-2.64%	6.48%
CDLX	39 Underperform	140.55M	-0.65	-312.30%	―	-12.84%	5.09%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%