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Angie’s List Gains 7%, Most Since IPO, on Strong Sales

Thursday, 23 Feb 2012 04:50 PM

 

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Shares of Angie’s List Inc., the consumer-review website with more than a million members, rose Thursday after the company reported fourth-quarter revenue that topped analysts’ estimates as the cost of acquiring customers declined.

Angie’s List advanced 7 percent to $15.47 at the close in New York, for the biggest one-day jump since Jan. 12. The shares have advanced 19 percent from their initial offering price in November.

The Indianapolis-based company, which provides reviews of plumbers, electricians and other service providers, said the cost of adding subscribers fell from $60 to $51 per customer during the period, from a year earlier. Total paid memberships were 1.07 million on Dec. 31, up 78 percent, after the company spent more on marketing, Angie’s List said in a statement.

“The cost of member acquisition has dropped dramatically, and especially so in the fourth quarter,” said Sameet Sinha, an analyst with B. Riley & Co. in San Francisco. “They’re seeing some significant efficiencies there and thus can invest more marketing dollars into the business now.”

Sinha, who recommends selling the stock, said those efficiencies may “hit a wall” if it reduces advertising spending going forward, which could affect subscriber growth.

In its first earnings report as a public company, Angie’s List said yesterday that fourth-quarter revenue increased 70 percent to $27.4 million, topping analysts’ estimates of $25.4 million. The company forecast first-quarter revenue of $29 million to $30 million. Analysts had estimated $28.3 million.

The fourth-quarter loss narrowed from a year earlier to $5.87 million, or 14 cents a share, from $8.24 million, or 30 cents. Analysts had estimated a loss of 12 cents, the average of projections in a Bloomberg survey.

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