Let’s talk about Angie's List (NASDAQ:ANGI).
Last spring, my sister-in-law referred a handyman to my wife and he promptly went around the house doing all sorts of jobs. She was thrilled, but something was wrong. He began rebuilding the stairs to the front door, and it was clear he was in over his head. Then one day in the middle of a project he got a call and said he hit the lottery- he bolted and that was that (except for the mess he left behind).
It turns out almost every single thing he worked on was a bust. So, my wife began using Angie’s List, and it's been great.
I've interviewed Angie, so I was already a fan and owned the stock before. But after looking at its 4Q earnings results this week, I think the company may have figured it out.
Paid membership was down, but total membership climbed to over 3 million. Acquisition costs declined to $27 from $70; for the full year service providers soared, sending revenue to $64 million (+25.6%). You can get anything from help on resumes, remote computer tune ups and even movers.
Full year 2015 revenue guidance is positive, but its EBITDA of $30 million from $4.2 million in 2014 and a negative $19 million in 2013, that underscores the improving financial health of the company.
The stock was in the takeover rumor mill, and these numbers actually make that more likely. But even without a deal, it should rally to $10 -- and longer term could double to $14-$15. It’s higher-than-average risk. Short-term, it could be a pop. I like it long-term.DISCLOSURES