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Angie's List, Inc. Message Board

  • investora2z investora2z Sep 13, 2013 8:12 AM Flag


    The stock seems to be a bit stable after the recent declines. However, the recovery has not been backed by volumes, which indicates that one should remain a bit cautious. This is more true because the sentiments for the stock have not changed at all. In fact, they may have worsened over the last few weeks. There is a lot of scope for profit booking because despite the 25% correction since July, the stock is still up by more than 90% on a 52 week basis. As mentioned in a recent SA article there are sell signals as the stock has broken below crucial supports. Any rise will meet with resistance. The author states that the company faces competition from Yelp (YELP) and InterActiveCorp's (IACI) Home adviser which do no charge customer any fees. Angie's List, on the other hand, charges for the services, and hence growth in subscriber base is low. It has around 2 million subscribers after several years in business. It spends about 80% of its revenue on sales and marketing, and needs to offer discounts to retain / increase subscribers. Yelp added almost 3.5 million reviews last quarter alone. Years of net loss have completely eroded the net worth of the company, and the high debt of $14.89 billion makes it financially risky. Future growth will be difficult if the same business model is pursued. The direct and indirect competition from other emerging segments is also increasing. Paid social content /celebrity influencers are also being preferred. IZEA (IZEA), which operates in this space reported results of a survey which indicated growing popularity of native ads. For Angie's list, it is more a matter of survival than growth. Growth without margins, is not likely to be sustained much longer. One cannot write off a brand like Angie's list, but something special needs to be done by the management soon. The level of shorts remains extremely high, which can lead to volatility.

9.63+0.11(+1.16%)Feb 12 4:00 PMEST