Angie’s List (ANGI) stock plummeted Wednesday after a horribly disappointing second quarter sparked fresh doubts from investors.
ANGI stock lost more than 20% in the wake of the report — the latest stumble in a long-lasting nightmare that’s continued more or less unabated since 2013. In her prime in 2013, ol’ ANGI traded at $28 per share. Today? The stock sits near all-time lows, below $5 a pop.
For the record, I’ve never been a huge fan of ANGI stock, and I still think it’s one of the least promising names in the stock market today, even after Wednesday’s precipitous drop.
Let’s take a look at the quarter the company would rather forget.
Revenue Miss
The consumer services website reported losses of 14 cents per share in the second quarter, better than the 17 cents per share Wall Street expected the company to lose.
Hooray.
That smaller-than-expected loss still wasn’t enough to redeem ANGI, as revenues came in meaningfully below estimates. Angie’s List logged revenue of $87.3 million last quarter, well under the $89 million analysts expected.
The lackluster results stand in stark contrast to the first quarter, when the company somehow managed to eke out a profit of 7 cents per share, or $4.4 million. In the wake of that unexpected news, ANGI stock rose 14%.
But that was then. This is now.
Then, investors still held out some hope that the stock wasn’t a total disaster, and that Angie’s List could one day morph into a consistently profitable consumer reviews and services website. Now, ANGI stock is seen for what it has mostly been for its publicly traded life: a machine that churns out losses with stunning regularity and never quite manages to live up to expectations.
The one constant between the first quarter and the second quarter? Disappointing revenue. Methinks there may be a trend emerging here.
Listen, I don’t get off on hating companies like Angie’s List. But the truth of the matter is, there just haven’t been many success stories in ANGI’s line of business. Go ask Yelp (YELP), a company with a somewhat different business model, but one that’s nonetheless still focused on consumer reviews. YELP stock, like ANGI, is also down about 50% in the last year.
Of course, Yelp doesn’t rely on memberships like Angie’s List does. Given the membership numbers from Angie’s List last quarter, perhaps that’s a good thing. Membership growth is slowing dramatically; last quarter, the company added about 290,000 members, a steep decrease from the nearly 400,000 new members it hauled in during the year-ago period.
With massive competitors like Amazon (AMZN) stepping in to compete against it, the outlook is even more bleak.
Given that Angie’s List still hasn’t posted a yearly profit since its IPO in 2011, I’d stay far, far away from ANGI stock.
As of this writing, John Divine did not hold a position in any of the aforementioned securities.
