Marchex shares fall after Stanford downgrades the company to sell

NEW YORK, Jul 01, 2008 (Thomson Financial via COMTEX) -- MCHX | Quote | Chart | News | PowerRating -- Shares of Marchex Inc. fell on Monday after the company was downgraded to sell from hold at Stanford Group, which said it had concerns about the company's ability to sustain cash flow.

"Marchex's operating history does not inspire confidence with largely disappointing results over the past two years," the firm wrote. "As such, we are concerned about Marchex's ability to return to cash flow growth and match guidance in the second half of 2008."

The firm added that seasonal softness in the third quarter, as well as a slow growth economy, were contributing to its bearish view.

"It remains unclear if Marchex can sustain traffic growth and avoid margin pressure. Past unique user and revenue growth correlated to increased marketing spend. As such, we are not convinced that Marchex's websites generate sustained organic traffic and cash flow," Stanford said, maintaining its $10 price target on the company.

Shares of Marchex fell 5.3% to $12.88 on Monday. The stock is up 19% since the start of the year. Ryan Vlastelica rv/tk1

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