Angie’s List, the consumer-review website, surged to the highest price in more than 10 months after forecasting sales that beat estimates as more members pay to use the service.
The shares (ANGI:US) climbed 24 percent to $16.86 in New York, for the highest closing price since April 2012. The stock has advanced 41 percent this year, compared with a 7 percent increase for the Russell 1000 Index.
Founded in 1995 by Angie Hicks, the company charges fees for access to reviews of plumbers, electricians and other service providers. Vendors can also pay to advertise on the site. Paid membership climbed 66 percent to 1.79 million in the fourth quarter, and the company’s first-quarter sales forecast of as much as $52 million suggests that user growth will continue at that rate, according to Jason Helfstein, an analyst at Oppenheimer & Co.
“2013 will mark a turning point,” Aaron Kessler, an analyst at Raymond James & Associates, wrote in a research report. He upgraded the shares to buy and raised his target price to $22 from $17. Helfstein increased his target to $18 from $15.
Lower marketing costs and a bigger base of paid service providers have positioned the company to rapidly grow revenues and boost investment in new products and technology, Kessler said.
Angie’s List yesterday forecast first-quarter sales of at least $51 million, beating analysts’ average estimate of $49.5 million, according to data compiled by Bloomberg.
The Indianapolis-based company reported fourth-quarter net income of $2.43 million, or 4 cents a share, compared with a loss of $5.87 million, or 14 cents, a year earlier. Revenue rose 68 percent to $46.2 million, exceeding analysts’ $46 million projection.
Angie’s List raised $114 million from an IPO in November 2011 after pricing shares at $13 apiece, the top of the proposed range.
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