Last week, you might have seen that Marchex, Inc. (NASDAQ:MCHX) released its first-quarter result to the market. The early response was not positive, with shares down 2.2% to US$1.33 in the past week. Revenues of US$12m came in a modest 3.1% below forecasts. Statutory losses were a relative bright spot though, with a per-share loss of US$0.03 coming in a substantial 25% smaller than what the analysts had expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Marchex

Following last week's earnings report, Marchex's twin analysts are forecasting 2024 revenues to be US$49.0m, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 28% to US$0.12. Before this earnings announcement, the analysts had been modelling revenues of US$50.4m and losses of US$0.16 per share in 2024. Although the revenue estimates have fallen somewhat, Marchex'sfuture looks a little different to the past, with a considerable decrease in the loss per share forecasts in particular.

There was no major change to the US$3.25average price target, suggesting that the adjustments to revenue and earnings are not expected to have a long-term impact on the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2024 compared to the historical decline of 8.6% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 3.2% per year. So while a broad number of companies are forecast to grow, unfortunately Marchex is expected to see its revenue affected worse than other companies in the industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, long term profitability is more important for the value creation process. The consensus price target held steady at US$3.25, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Marchex , and understanding these should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.