Angie's List (NASDAQ:ANGI) may claim its clients love the access to vetted professionals -- from plumbers to anesthesiologists -- but the company and stock are a bit more difficult to feel positively about. The Web-based subscription-referral business trades at more than 50 times its forward earnings and has been accused more than once of using murky business practices. On Wednesday, shares fell even though the company met the Street's expectations on the top and bottom lines, but it failed to satisfy forward-looking estimates. The company needs to reign in its expenses and improve public perception before investors will take to the rich earnings multiples implied in Angie's stock price.

Review
Shares were down nearly 8% after hours on Wednesday due to Angie's List's just-ended quarter. The company lost a net of $13.5 million in its fiscal third quarter, or $0.23 per share. Analysts had been expecting $0.03 better. Revenue was less disappointing at $65.5 million, where analysts were expecting $66.1 million. The net loss also comes in as a decent improvement over the prior year's loss of $0.32 per share.

To end the year, Angie's List is looking at top-line sales in the neighborhood of $68 million to $69 million, whereas the market wanted $70 million.

The two misses, EPS and guidance, were not too damning, but analysts are concerned that the company is struggling to control its costs, prompting the major sell-off. In the third quarter, marketing expense ticked up another $2 million to $28.2 million. Management guided for lower marketing spend in the final quarter of the year.

Where it stands now, Angie's List offers investors little in the form of cash flow and a business model that may depend too heavily on aggressive sales and marketing practices -- all for a price (see above forward earnings ratio) that rivals even some highly profitable technology businesses. Do the bulls know something the rest of us don't?

Questions
In the last year, Angie's List has come under fire by outspoken short-sellers, such as Citron Research. Citron alleged the company's customers were increasingly dissatisfied with the service, and alleged that the so-called evaluation process of its chosen businesses was simply a matter of taking a check in exchange for favorable site position -- with little to no investigation into the quality of the referred party. Obviously, the foundation of the Angie's List business model is that it weeds out the contractors, doctors, and other professionals that consumers might want to avoid, and instead directs them to the best of breed. If consumers lose trust in Angie's List's vetting process, the whole thing goes kaput.

One of the company's executives has taken flight recently, adding to the storm. Chief Technology Officer Manu Thapar left the company abruptly and with no explanation. Around the same time, the company had randomly cut prices in major markets by up to 75%, prompting outrage from investors left in the dark. Management simply said it was practicing different price strategies.

At best, Angie's List appears to be a growing business (attractive top-line growth) experiencing some growing pains as a public company. It is not particularly shareholder-friendly, its actions appear rash and go unexplained, and its fundamentals are barely sturdy enough for even the most risk-seeking investor. To assign an Angie's List-style grade to the company itself, a C would be pushing it.

Fool contributor Michael Lewis has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.