Why Angie's List Shares Skyrocketed

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of local services review site Angie's List (NASDAQ: ANGI  ) surged a whopping 27% today after the company's quarterly results and guidance topped  Wall Street expectations.

So what: The stock was pounded in the second half of 2012 on concerns over mounting losses, but today's fourth-quarter results -- EPS of $0.04 versus the consensus estimate of a $0.02 loss -- coupled with upbeat guidance suggests that management's investments are indeed paying off. In fact, the company said it ended 2012 with 1.79 million paid memberships, up 66% from the end of 2011, giving investors plenty of confidence in its growth prospects going forward.

Now what: Management now sees first-quarter revenue of $51 million-$52 million, just ahead of Wall Street's view of $49.4 million. "We ended 2012 in a strong operational position with the momentum to simultaneously deliver continued rapid growth in revenue and margins, increased investments in products, technology, and mobile offerings, and with the confidence that we will accomplish this within the liquidity parameters we discussed on our third quarter earnings call," said CFO Bob Millard in a conference call. With the stock now up about 100% from its 52-week low, however, I'd wait for some of the exuberance to fade before buying into that bull talk.

Interested in more info Angie's List? Add it to your watchlist.

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