BofA/Merrill has cut Angie's List (ANGI -4.9%) to Neutral ahead of its Feb. 12 Q4 report, citing a 24% YTD run-up and a belief the Street's 2014/2015 EBITDA estimates are too high.
Whereas Angie's consensus 2014 and 2015 EBITDA forecasts respectively stand at $21.2M and $64.5M, BofA/Merrill's estimates are only at $10.8M and $37.2M due to a belief marketing/tech investments will limit margin expansion.
In addition, the firm projects Q4 EPS of only $0.11 (below a $0.15 consensus), and doesn't expect to see subscriber or revenue upside. At the same time, it does believe sales force productivity will improve in 1H14.
BofA/Merrill's downgrade comes two weeks after B. Riley upgraded shares to Buy.