Why Angie's List, Inc. Shares Soared Today

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 Angie's List (NASDAQ: ANGI  ) jumped 13% Friday following an analyst upgrade.

So what: Citing upbeat commentary from Angie's List CEO William Oesterle at the Bank of America Merrill Lynch 2014 Global Technology Conference, Bank of America analyst Paul Bieber upgraded shares of the business reviews site from neutral to buy. Bieber also noted Angie's List is enjoying a positive reception to its new tiered pricing structure, and reiterated his existing $16 price target.

Now what: Even after today's pop, shares are still down around 25% year to date and currently trade at a rich 44 times next year's expected earnings. But that's not entirely uncommon for a company that is still focusing on top-line growth as it shuffles for market share at the expense of profits.

For perspective, I opted to watch Angie's List from the sidelines when its fourth-quarter results and forward guidance disappointed the market in February. And I'll admit it's certainly more interesting now at today's lower price point. But personally -- and keeping in mind Oesterle also sounded plenty optimistic back then -- I still prefer not diving in until I get a better feel for Angie's List's long-term sustainability.

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Comments from our Foolish Readers

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  • Report this Comment On June 07, 2014, at 1:20 AM, eticket wrote:

    Anyone who would take the time to write about Angie whatever has no credibility with this author.

    It is an indication of the lows the Fool has fooled to.

    Give us a break.

  • Report this Comment On June 07, 2014, at 1:22 AM, eticket wrote:

    There is no truth to be found on the fool website.

    Only fools

  • Report this Comment On June 09, 2014, at 12:49 PM, youngblood58 wrote:

    eticket:

    A bit of pot calling the kettle black, no?

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