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 consumer-review website Angie's List (ANGI) soared 25% today after its quarterly results topped Wall Street estimates.
So what: Angie's List shares have been crushed in recent months on wider-than-expected losses, but today's third-quarter results -- EPS loss of $0.32 on revenue of $42 million versus the consensus loss of $0.34 and revenue of $41 million -- coupled with decent guidance suggests that the company is gaining traction. While hefty advertising costs continue to weigh heavily on the bottom line, a 68% year-over-year jump in total paid memberships is reigniting optimism over its potential long-term profitability.
Now what: Management now sees fourth-quarter revenue of $45 million to $46 million, in line with Wall Street's estimate of $45.6 million. "First year advertising revenue originations have grown 106% year-over-year. In addition, service provider revenue renewal rate remained over 100%," CEO Bill Oesterle said. "This dynamic should contribute significant additional margin in the coming quarters." Given the young company's still-highly speculative nature, however, I'd remain cautious about buying into that bull talk.
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