Why Angie's List Inc Stock Popped 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 Inc rose as much as 15.7% Wednesday after the local business reviews specialist increased its financial guidance and announced the planned departure of its CEO. By 1:30 p.m. the stock was up about 9% from the previous close.

So what: First, Angie's List said its co-founder and CEO, William Oesterle, has decided to step down from his role with the company to "pursue other interests, including becoming more civically involved in the State of Indiana."

This might look discouraging at first glance. But it's apparent Oesterle has no intention of leaving his company in a lurch. Angie's List says he agreed to remain in his current role as CEO until a successor is appointed, and will serve on the board of directors "at least through the remainder of his current term." Angie's List has retained a leading executive search firm to assist in finding a new CEO.

In addition, Angie's List not only reaffirmed its previous 2015 revenue guidance for a range of $357 million to $363 million, but also raised its expected 2015 adjusted EBITDA range to $30 million to $32 million. Previously, Angie's List told investors to expect 2015 adjusted EBITDA of $28 million to $30 million. Angie's List also explained the difference is primarily due to "efficiencies in operating expenses."

Now what: With Angie's List stock still down around 50% over the past year, it's unsurprising investors might bid up shares given even this small bit of encouraging news. With that in mind, however, the good news doesn't do much to appease investors concerned about the reasons behind the drop, namely declining membership growth and renewal rates. Until I see evidence of broader, sustained improvement in those metrics over the long term, I'm still perfectly content watching Angie's List from the sidelines.

The article Why Angie's List Inc Stock Popped Today originally appeared on Fool.com.

Steve Symington 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.

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