Should You Care About’s IPO? has officially set its IPO range, joining other high-growth Internet-based companies like Zillow, Angie’s List, and Yelp. But is a buy?

Jan 13, 2014 at 11:00AM is an online home-caregiver marketplace that is soon to be publicly traded. While this might be the first time that you've heard of, its growth matches high-profile industry peers. And after hard deliberation, investors might find Zillow (NASDAQ:ZG), Yelp (NYSE:YELP), and Angie's List (NASDAQ:ANGI) to be somewhat similar. However, does this fact make an IPO buying opportunity?

What is is a marketplace of at-home caregivers. It is similar to several other Internet-based companies, but not exactly like any other company.

Yelp is a review site, and earns the majority of its revenue through advertising. is also a review site to some extent, creating a social network of caregivers and care-seekers (families), and also of various services that the company provides. However, is not totally reliant upon advertising, having its own niche and revenue-stream that extends outward.

Zillow is a real-estate marketplace. So, both it and have their own marketplaces. earns the majority of its revenue through subscriptions/fees by care-seekers; Zillow earns the majority of its revenue by agents via fees/subscriptions for advertising on the site. Therefore, these two companies are very similar in terms of operating approach, but clearly differ in the product being offered.

Finally, Angie's List, which is also a review site but charges members via subscription, is much like

Is being offered at a fair price? has filed its S-1 and is prepared to price at $14-$16 per share, or a market cap between $469 million and $536 million. This expected market capitalization would imply a price-to-sales ratio around 6-7, which isn't bad compared to most of its peers.


Price/Sales Ratio





Angie's List


As you can see, Yelp and Zillow trade at multiples that far exceed seven times sales.

Angie's List, on the other hand, is very cheap, which is mostly due to a particularly high short ratio of 16.4 due to questionable business practices. In particular, famed short-sellers from Citron Research have often detailed Angie's aggressive accounting, declining revenue-per-member numbers, and reviews that can't be trusted, due to service providers paying fees and receiving great reviews on the site. As a result of these widely debated complaints, Angie's List has not traded with the same level of momentum as its peers.

With the exception of Angie's List, you can see that a the expected sales ratio would be a highly attractive valuation for the company. It definitely beats the 58 times sales that we've seen with Twitter.

However, as all investors know, an Internet-based company's valuation or premium is a reflection of its growth and upside potential. With that said, let's take a look at how the four companies stack-up in the growth department, or at least in 2013.


2013 Revenue Growth






Angie's List


Clearly, is the fastest grower in a booming bunch of companies. And what's even more impressive is that according to its S-1, its sales/marketing expenses rose just 57% in the same period, far less than revenue growth. This signals that is growing at a faster rate than its spending, which is a good sign for long-term profitability. Thus, if we use just what we've discussed, it seems reasonable to suggest that at $14-$16 per share, is a great opportunity, and that it's actually worth a lot more based on its peers.

Is a value opportunity?
2013 was really a breakout year for, putting the company on the map. But as all investors know, if you're going to pay a high premium for an Internet-based company, then you have to know that there are solid long-term growth opportunities.

With that said, is in a good place: It earns most of its sales through one service (membership fees), has large advertising capabilities with 6.4 million monthly unique visitors, and operates a service where all members benefit. To specify, families looking for caregivers can post jobs, interview, and find an employee, while caregivers can find work. Hence, the business model benefits all involved.

Moreover, what's really encouraging is that is a young company, and the IPO will bring a lot of attention to its services. But also, aside from child and senior care, the company could always branch out into other career-related services, much like LinkedIn has accomplished. Therefore, the ceiling appears high for, and with 20 times sales being the standard for online companies, its valuation has a lot of room to run before being called expensive.

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Brian Nichols has no position in any stocks mentioned. The Motley Fool recommends Yelp and Zillow. The Motley Fool owns shares of Zillow. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

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