Oct. 25 (Bloomberg) -- Angie’s List, the consumer-review website, posted a record surge after reporting sales that beat estimates as more members paid to use the service.
The shares climbed 27 percent to $11.56 at the close of regular trading in New York, for the biggest gain since the stock began trading on Nov. 17, 2011. The stock has lost 28 percent this year.
Founded in 1995 by Angie Hicks, the company charges membership fees to access reviews of plumbers, electricians and other service providers. Vendors can also pay to advertise on the site. Third-quarter revenue increased 75 percent to $42 million, compared with the same period a year earlier, the company said in a statement yesterday. Analysts on average had estimated sales of $41.33 million. Total paid membership rose 68 percent to 1.66 million.
“Another top line beat solidifies growth prospects at Angie’s List,” wrote Andre Sequin, an analyst at RBC Capital Markets, in a note to clients today. “Angie’s List has continued to achieve milestones on its way to profitability.”
The Indianapolis-based company forecast fourth-quarter sales of $45 million to $46 million, compared with an average estimate of $45.7 million.
In the third quarter, Angie’s List had a net loss of $18.5 million, or 32 cents a share, compared with a loss of $17.4 million, or 66 cents, a year earlier.
Angie’s List also announced a new pay structure for sales staff, that will add a base salary to compensation that had previously been commission-only.
That change “should free up additional working capital which can be used to drive further growth,” Sequin wrote.
Angie’s List raised $114 million in an IPO last November after pricing shares at $13 apiece, the top of the proposed range, and held a secondary offering May 15.
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