Angies List in compare
Revenues of Angies List are about the 4-fold of Local Corp (yearly revenues of Local Corp ab out equal with the revenues of Angis List in a quarter), but the market-cap of Angies was yesterday with 311.89 million 20-fold of the idiotic low 15.33 million of Local Corp – a jole by the extreme bad numbers of Angies List.
Investors gave Angie’s List a bad review Wednesday, as disappointing third quarter earnings sent the stock plummeting more than 18%.
For a company that has never seen a profitable year, the question for investors wasn’t if Angie's List ANGI +2.4% would lose money this quarter, but how much. The consumer review aggregator and online marketplace posted a third-quarter net loss of $5.2 million, 61% smaller than last year’s $13.5 million loss, but still disappointing to Wall Street analysts. The per-share loss of 9 cents was bigger than the consensus estimate of 2 cents.
Wednesday’s stock slide signals investors are dialing back expectations for when profits will actually materialize, says Needham & Co. analyst Kerry Rice. The company is struggling to attract a critical mass of customers and businesses – both of which pay subscription fees to Angie’s List – without pouring excessive amounts of money into marketing.
“I don’t take any of this to mean that Angie’s list is failing as a company,” Rice says. “It’s more a question about timing and how fast the company can grow and become profitable.”
Revenue growth isn’t the problem, as Angie’s List posted 24% higher sales from a year ago at $81.3 million. Expenses are down slightly too, as the company spent spent $22.5 million on marketing in the third quarter, a decline of 20% over last year, bringing the acquisition cost per new member down 16%. The problem is the pace of membership growth fell too, with new membership additions down 6% from the prior year.
Fiscal Year 2014 of Local Corp
Full year 2014 revenue is expected to be between $82.8 million and $83.3 million, compared with prior guidance of $87 million to $90 million. Full year 2014 net loss is expected to be in the range of $5.5 million to $5.7 million. Adjusted EBITDA* is expected to be in the range of $2.2 million to $2.4 million, in line with previous guidance of $2.0 million to $2.4 million.