Marchex (MCHX) AI Stock Analysis

• Market Cap: $86.59M
• Dividend Yield: N/A
• Average Volume (3M): 25.75K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.19
• 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: 38,646
• 30 Day Avg. Volume: 25,747
• PEG Ratio: 0.29
• Price to Book (P/B): 2.31
• Price to Sales (P/S): 1.57
• P/FCF Ratio: -49.27
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 2.04
• Enterprise Value/Gross Profit: 3.15
• Enterprise Value/Ebitda: -52.52
• 1Y Price Target: $3.00
• Price Target Upside: 53.06% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 50 Neutral
• Price Target: $2.00 ▲(2.04% Upside)

Marchex's overall score reflects strong cost management and strategic initiatives, but is weighed down by declining revenues, profitability challenges, and liquidity issues. Technical indicators show mixed signals, and valuation concerns persist due to negative earnings. The earnings call provided some optimism with new product launches and partnerships, but also highlighted significant risks.

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 shows strong cost management with a gross profit margin of 64.0%, but faces declining revenues and persistent profitability challenges, with negative EBIT and net profit margins. The balance sheet is stable with low debt, but negative cash flows indicate liquidity issues.

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	47.53M	48.12M	49.91M	52.17M	53.48M	51.22M
Gross Profit	30.68M	30.95M	29.33M	31.71M	31.78M	30.33M
EBITDA	-1.84M	-1.80M	-5.76M	-4.03M	-5.68M	-36.66M
Net Income	-4.64M	-4.95M	-9.91M	-8.24M	-4.39M	-38.45M
Balance Sheet
Total Assets	41.98M	43.20M	47.48M	56.79M	65.83M	77.73M
Cash, Cash Equivalents and Short-Term Investments	10.49M	12.77M	14.61M	20.47M	27.09M	33.85M
Total Debt	881.00K	1.22M	2.10M	1.64M	3.26M	10.09M
Total Liabilities	9.94M	10.57M	11.61M	12.68M	14.32M	25.05M
Stockholders Equity	32.04M	32.63M	35.87M	44.11M	51.50M	52.69M
Cash Flow
Free Cash Flow	-1.55M	-1.53M	-5.77M	-5.16M	-7.69M	-4.73M
Operating Cash Flow	-562.00K	-1.10M	-4.39M	-2.29M	-6.34M	-3.37M
Investing Cash Flow	-890.00K	-429.00K	-1.31M	-2.87M	-951.00K	981.00K
Financing Cash Flow	-34.00K	-307.00K	-160.00K	-1.46M	528.00K	-5.49M

Marchex Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.96
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 1.96 is above the 20-day moving average (MA) of 1.87, above the 50-day MA of 1.94, and above the 200-day MA of 1.86, indicating a bullish trend. The MACD of -0.01 indicates Negative momentum. The RSI at 56.34 is Neutral, neither overbought nor oversold. The STOCH value of 89.05 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MCHX.

Marchex Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
MCHX	50 Neutral	$86.59M	―	-13.93%	―	-2.64%	6.48%
FLNT	46 Neutral	$66.68M	―	-115.36%	―	-12.84%	63.95%
HHS	45 Neutral	$26.92M	―	-14.09%	―	-6.49%	89.87%
DRCT	45 Neutral	$7.80M	―	-320.07%	―	-74.79%	-690.57%
INUV	45 Neutral	$52.55M	―	-36.41%	―	21.45%	41.21%