Why the “$0.00” EPS and the $0.1 M net income line up
EPS is calculated as Net Income ÷ Diluted Shares Outstanding.
Marchex reported a net profit of $0.1 million (≈ $100,000). With a diluted share base that is typical for a small‑cap Nasdaq‑listed company (roughly 10 million‑plus shares), the per‑share figure works out to:
[
\text{EPS} = \frac{100,000}{10,000,000}=0.01 \text{USD per share}
]
Because earnings per share are presented to two decimal places, a value of $0.01 is rounded down to $0.00. The “$0.00 per diluted share” therefore does not mean the company earned nothing; it’s simply a reporting artifact caused by the combination of a modest net profit and a relatively large share count.
Trading take‑aways
Fundamental view: The tiny profit margin (≈ 0.9 % of $11.7 M revenue) signals that Marchex is still in a cost‑recovery phase. The positive net income, however, is a modest improvement over a loss‑making prior year and suggests the AI‑driven model is beginning to generate cash. Watch for any upward trend in gross margin or operating leverage in upcoming quarters.
Technical bias: The stock has been pressured by the sub‑$0 EPS headline and a modest‑negative sentiment score (‑15). If the price is near the 200‑day moving average and showing a shallow bounce off that level, a break above the recent high could trigger a short‑term rally as traders price in the “first profit” narrative. Conversely, failure to clear that resistance may keep the downside bias intact.
Actionable insight: Given the low absolute earnings, the catalyst for the next move will be revenue growth and margin expansion, not the EPS number itself. Consider a small‑position, risk‑managed long if the price holds above the 200‑day trend line and volume confirms a breakout, with a stop just below the recent swing low. If the stock remains stuck below that level, a defensive short with a tight stop above the resistance could capture the continuation of the weak‑fundamental narrative.