Angie's List Gets Analyst Upgrade On Recent Pullback
By KEVIN SHALVEY, INVESTOR'S BUSINESS DAILY
Posted 01:24 PM ET
Angie's List (ANGI) stock climbed Wednesday after two investment banks upgraded the stock to a buy, with one saying the stock's recent pullback is an opportunity.
Shares were up nearly 2% in afternoon trading in the stock market today near 21, still far off the stock's record July 18 high at 28.32. But the stock did find support at its 40-week moving average last week.
The Indianapolis-based company reported in-line Q2 results in July. The stock has been under pressure in part because of a negative report about the service industry and a proposed class action lawsuit against Angie's List, wrote RBC Capital Markets analyst Andre Sequin.
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"Recent negative press was misconstrued, and the pullback creates an entry opportunity, in our view," wrote Sequin, who upgraded to outperform, or buy, from sector perform, or hold.
Analysts at UBS upgraded to the same rating, according to Analyst Ratings Network. Both RBC and UBS upped their Angie's List price target to 29 from 28.
The company has "continued to perform well," meeting or exceeding Wall Street's expectations since its initial public offering in November 2011, wrote Sequin.
The company's been investing in advertising to gain new subscribers, who pay monthly or annual fees to access reviews of plumbers, carpenters or other service companies. It competes with free-to-use Yelp (YELP), which relies on advertising spending for most of its revenue.
"As the top-line grows (at Angie's List), revenue will eventually outpace selling and marketing spend," wrote Sequin, "which will drive the profitability we expect to see next year."