MARCHEX INC (MCHX) Stock Analysis
MARCHEX INC
▾ What's in the 42/100 risk score? (higher = riskier)
Contributions (weight × component score) sum to the total. This near-term score now includes fundamental health (leverage, FCF trend). It excludes the Altman Z score, whose retained-earnings input this filer does not report separately. See the Financial Health section for the full balance-sheet read.
How to read MCHX (pre-profit growth)
This company is reinvesting instead of generating profit, so a standard DCF cannot price it. The useful question is whether the growth the market is paying for is achievable — and whether the company can fund itself until then.
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Reverse-DCF — the growth the price demands ↓
It shows exactly how fast the business must grow to justify today's price. Compare that to what comparable companies have actually achieved.
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Cash runway ↓
Can it reach profitability before it has to raise money and dilute shareholders?
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Interactive calculator ↓
Set your own growth + margin assumptions and see what the business would be worth if you are right.
Standard DCF doesn't fit MCHX well — but that's expected for this kind of business. The Rule of 40 (Pre-Profit Growth) Lens below uses the metrics actually used by analysts who value software. Reverse DCF + Football Field also work as cross-checks.
Quality & solvency checks
Cheap stocks can be cheap for a reason. These screens warn when a low valuation comes paired with structural fragility.
Why it matters: Cheap-looking stocks (low P/E or P/B) often have low Z-scores because the market knows the company is dying. Z-score warns you before you fall into a value trap.
Reference: > 3.0 = safe zone · 1.81–3.0 = grey zone · < 1.81 = distress zone
Full explanation →
The Z-score needs working capital, retained earnings, EBIT, sales and total assets from the latest balance sheet, and at least one of those isn't reported in machine-readable form here — common for foreign private issuers. We leave it blank rather than compute a distress verdict from an estimated input. It doesn't affect the reported figures in the financial tables below.
▾ The checks — what passed, what didn't (and what we couldn't measure)
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✗ Positive net incomeNet income -$5.2M in FY2025.Why this matters: Does the company actually earn a profit? Sustained losses eventually force it to raise money — diluting you — or take on debt.
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✗ Positive operating cash flowOperating cash flow -$1.4M (was -$1.1M the prior year).Why this matters: Profit can be an accounting figure; cash from running the business is harder to fake. Negative operating cash flow means the core business consumes cash and must be funded externally.
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✓ Cash flow backs up reported profitOperating cash flow -$1.4M vs net income -$5.2M.
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✗ Return on assets improvingReturn on assets -13.2% vs -11.5% a year ago.Why this matters: Is the company squeezing more profit out of each dollar of assets than last year? Rising = getting more efficient; falling = the opposite.
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✓ Debt load (vs assets)The filing reports no interest-bearing debt in either year (total assets $39.7M).
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✗ Short-term liquidity (current ratio)Current ratio 2.36x vs 2.40x a year ago.Why this matters: The current ratio compares assets it can turn to cash within a year against bills due within a year. Below 1.0 means it may struggle to cover near-term obligations.
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· Share count (dilution) (n/a — data not reported; not scored)
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· Pricing power (gross margin) (n/a — data not reported; not scored)
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✓ Sales per asset (asset turnover)Asset turnover 1.14x vs 1.11x a year ago.
Missing data is never counted as a pass or a fail — it's shown as n/a and excluded from the denominator. Each check compares the company against its own prior year.
Plain English: the company holds about $10M in cash and is burning roughly $1M/year in operations. At that pace, the cash lasts 7.1 yrs before it must raise capital (diluting shareholders), take on debt, or cut spending.
Assumes constant burn and ignores financing/asset sales. For pre-profit biotech and growth companies, this matters more than a DCF — a great drug pipeline is worthless if they run out of money before approval.
A standard discounted cash flowDCF — Discounted Cash Flow — sums up all future cash a business will produce, adjusted for the fact that future dollars are worth less than dollars today.
Why it matters: It is the most fundamentally honest valuation method when applicable — but only works for companies with predictable, positive cash flow.
Reference: Best for: mature, profitable businesses. Fails for: pre-profit growth, banks, REITs.
Full explanation → (DCF) valuation is not meaningful for Marchex Inc. because the company has negative operating cash flow and has been unprofitable in recent years. Investors are likely focused on potential future revenue growth and a return to profitability, rather than current cash flows. The primary quantifiable risk is the continued revenue decline of -4% per year over the last four years.
As of 3 months ago
Anatomy of a share
What you're buying per share. Bars are at the same scale so you can see the relative size of revenue, costs, cash flow, and debt — not just read them in a table.
What you actually need to decide
Every stock price is a disagreement. Here's the single thing that must go right for the bulls, the single thing that breaks the thesis, and the concrete signposts to watch so you can update your view as real results arrive.
- Quarterly revenue growth turning positive
- Achieving positive operating cash flow
- Announcements of significant new customer wins or platform enhancements
The trend, in plain numbers (FY2024 → FY2025, latest reported)
Straight from the financial statements — no model, no opinion. For a small or unprofitable company, the direction of these numbers usually tells you more than any single valuation.
- Revenue fell -6% to $45.4M.
- Free cash flow is negative at -$3.8M — the cash burn widened vs last year.
- Still unprofitable at -$5.2M — loss widening.
Nothing was clearly improving year-over-year.
Management & Leadership
Michael A. Arends serves as the CEO of Marchex, a position he has held for several years, guiding the company's strategic direction in conversational intelligence. Russell C. Horowitz is the Executive Chairman and co-founder, providing long-term vision and oversight.
What They Make
Marchex provides conversational intelligence solutions that help businesses analyze customer interactions, primarily phone calls, to improve sales and marketing performance. Their services are used by businesses across various industries to understand customer behavior.
End Markets
Revenue Drivers
Why Is It Priced Like This?
Why Customers Pay
What we use instead: earnings (P/E, EV/EBIT), book value (P/B) — computed from the figures this company does report, shown in the sections below. Those numbers are unaffected by the missing cash-flow data.
The market is likely pricing Marchex based on expectations for a turnaround in its revenue trajectory and a path to sustained profitability, given its current negative net income and operating cash flow. The market may be assigning value to the potential for its conversational intelligence platform to gain significant market share in a growing niche, which is not in the model.
Business Model & Valuation
How They Make Money
The company has negative operating cash flow, suggesting it funds operations through existing cash reserves or potential future equity raises, as no dividend or buyback data is available.
Growth / Revenue DCF
Negative free cash flow: revenue/margin growth model used - standard FCF DCF is unreliable for companies still scaling.
Show advanced inputs
| Revenue Growth | 2.0% |
What this model does NOT do: this is a consolidated owner-earnings FCF model. Standalone segment assumptions: none. It does not project product, services and recurring/cloud lines independently; their combined effect is embedded in the historical revenue and cash-flow trend the model extrapolates. The calculator above can only approximate a segment's impact through the single consolidated growth rate — it cannot model any one line separately. For a true segment-level view, build a separate model from the company's segment disclosures.
Maturity & Competitive Position
Moat Signals
Revenue has been declining at -4% per year over the last four years, from $53M to $45M.
Geography & Markets
Marchex is headquartered in the US and primarily serves customers within North America, though specific geographic revenue segmentation is not available from current data sources.
Geographic Risks
Market Signals
These are timing signals, not value signals — they describe the stock's recent price behavior, not what the business is worth. Use them for the "the thesis looks good, but is now the moment?" question. Each tile below explains what it's saying.
Why it matters: Short-term contrarian indicator. Extreme readings often precede mean reversion, though not always.
Reference: 30–70 normal · >70 overbought · <30 oversold
Full explanation → (14)53.3NeutralMomentum is balanced — neither overbought nor oversold.
Why it matters: When the fast line crosses above the slow line, short-term momentum is turning up; below, turning down. A timing cue, not a value signal.
Reference: Line above signal = bullish momentum · below = bearish
Full explanation →BearishLine below signalThe fast trend is below the slow trend — short-term momentum is currently downward.
Technicals describe price, not the business. A great company can have a "bearish" tape (a buying chance) and a weak one a "bullish" tape (a trap). Pair these with the valuation and health sections above.
QUALITY
Data Quality & Risk Flags (8 notes — click to expand/collapse)
Guardrail Notes (7)
- FCF negative: revenue/margin growth model projects future cash flows from revenue trajectory.
- Terminal growth (3%) capped to 1.6% (80% of near-term growth 2%).
- Shares from unknown — per-share values may be less accurate.
- Illiquidity discount 25% applied (small/micro-cap — harder to exit, demand a margin).
- Shares/market cap missing or defaulted; per-share valuation unreliable.
- Shares defaulted to 1; IV is NOT meaningful — treat as data-unavailable.
- DATA UNAVAILABLE: per-share values suppressed due to missing/unreliable shares data.
FINANCIALS
Financial Statements (5-year tables — click to expand)
From MARCHEX INC's SEC filings (EDGAR).
Income (5yr)
| Year | Revenue | Net Income | EPS |
|---|---|---|---|
| 2025 | 45.4M | -5.2M | $-0.12 |
| 2024 | 48.1M | -4.9M | $-0.11 |
| 2023 | 49.9M | -9.9M | $-0.23 |
| 2022 | 52.2M | -8.2M | $-0.19 |
| 2021 | 53.5M | -4.4M | $-0.10 |
Cash Flow (5yr)
| Year | Operating CF | CapEx | − SBC & adj. | Free Cash Flow |
|---|---|---|---|---|
| 2025 | -1.4M | 36,000 | 2.4M | -3.8M |
| 2024 | -1.1M | 382,000 | 1.7M | -3.2M |
| 2023 | -4.4M | 1.4M | 2.4M | -8.2M |
| 2022 | -2.3M | 2.9M | 2.6M | -7.8M |
| 2021 | -6.3M | 1.4M | 2.7M | -10.4M |
How we define FCF: operating cash flow − capital expenditure − stock-based compensation (owner-earnings basis — SBC is a real cost to shareholders even though it's non-cash). Latest year: -1.4M − 36,000 − 2.4M (SBC & adj.) = -3.8M. This is the same owner-earnings FCF definition the valuation model uses, though the DCF's starting value is a projected from revenue × terminal margin, not this single year.
Balance Sheet
| Total Assets | 39.7M |
| Total Liabilities | 9.6M |
| Equity | 30.1M |
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