Deutsche Bank Starts Marchex (MCHX) at Buy

Deutsche Bank initiated coverage on Marchex (NASDAQ: MCHX) with a Buy rating and a price target of $13.00.

Analyst Ross Sandler said, "Marchex is a leading company in an emerging digital space around call-based performance advertising. Marchex’s technology generates and tracks in-bound calls to large and small marketers, and earns a fee for each call, somewhat analogous to Google’s cost-per-click model. Shares trade at 1.7x call-based revenue, in-line with ad tech peers, yet Marchex is experiencing revenue growth acceleration currently and is consistently EBITDA positive."

"We see four primary reasons to add or initiate a MCHX position: 1) as mentioned above, revenue growth is re-accelerating in 2014 to around +40% currently, 2) call based advertising is an enormous potential market opportunity, and MCHX is the only public pure play, 3) the company’s technology is somewhat unique and harder to replicate than most sectors in ad tech, and 4) the valuation is largely in-line with the ad tech peer universe, despite better margin and growth re-acceleration," he added.

For an analyst ratings summary and ratings history on Marchex click here. For more ratings news on Marchex click here.

Shares of Marchex closed at $10.15 yesterday.

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