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Angie's List, Inc. Message Board

  • rantangan rantangan Sep 18, 2012 12:38 PM Flag

    Break-even drive

    It seems the underwriter of the 2ndary is trying to drive the price to as close as break-even before helping clients (and themselves) dump.

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    • One short term credit crunch and they can't fund the business. They need $60 million in loans or capital to get through next year. Who the hell is going to pay that?

      Sentiment: Strong Sell

      • 1 Reply to bagofswags
      • Couldn't agree more...currently trading at 4.5x revenues, which is still well above their comp group median of 3.0x...looking out to 2013E revenues, it's still trading at 4.0x, which is above the median of 2.9x.

        The only companies trading higher are LinkedIn and Yelp, which have much more compelling stories and are EBITDA POSITIVE. Angie's list isn't expected to be EBITDA postive until late 2014 at 3.2%. For comparison purposes, relative 2014E EBITDA margins for LNKD and YELP are expected to be 25% and 15%, respectively.

        Should come down again ~30% to high $7's to be more appropriately valued considering growth / profitability.

        As you pointed out, cash requirements are another headwind and will force another follow-on equity offering (dilution) or debt raise (profitability hit). Either way, it's not good.

10.50-0.12(-1.13%)Jul 11 4:00 PMEDT

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