Seeking Alpha

Angie's List slumps on BofA/Merrill downgrade

  • 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.
Comments (4)
  • Weighing Machine
    , contributor
    Comments (688) | Send Message
     
    Fair value of ANGI = $3/ share
    5 Feb, 10:09 AM Reply Like
  • JLucky
    , contributor
    Comments (46) | Send Message
     
    I guess we know who isn't underwriting a possible follow-on or further debt.
    5 Feb, 12:08 PM Reply Like
  • EnterUserName
    , contributor
    Comments (19) | Send Message
     
    It could be the polite thing to do. You downgrade one step now, and reexamin the rating next week when they announce Q4. It gives clients a chance to exit.

     

    Based on average daily web traffic from several public reporting sites, they've lost up to 40% of daily unique visitors. ANGI is at the verge of becoming irrelevant.
    6 Feb, 09:55 AM Reply Like
  • JLucky
    , contributor
    Comments (46) | Send Message
     
    You're correct. My cynical comment aside, BAML is doing right by their clients.
    6 Feb, 12:17 PM Reply Like
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