Angie’s List Inc (ANGI), eBay Inc (EBAY), Yelp Inc (YELP): Competition and Lawsuits Are Among the Reasons to Avoid This Internet Company

Earnings

In the recent second quarter, Angie’s List posted a loss of $0.25 per share. This met analysts’ targets, but the company did fall short of revenue estimates. Total revenue in the quarter grew 62% to $59.2 million, but missed estimates by $0.3 million.

The highlight of the earnings report was a new record number of members. Total paid members rose 51% to 2.16 million. The number of service providers listed on the site grew 42% to 42,452. These numbers are a little misleading, however, as they relate to Angie’s List expansion into new markets.

Conclusion

eBay Inc (NASDAQ:EBAY) has been a huge Internet company since its early auction days. The company now dominates the online auction and online payment businesses in the United States. A site dedicated to connecting professionals with customers could help eBay expand its localized presence and could also boost shares of stock. Even though it isn’t a big growth driver, eBay shares should be bought on any weakness.

Shares of Angie’s List trade close to $25 at the time of writing. In the past fifty-two weeks, shares have gone as high as $28.32. Analysts expect the company to post double-digit sales growth in the 2013 and 2014 fiscal years. The company is expected to post a net loss in fiscal 2013 and a small profit of $0.32 per share in fiscal 2014. With competition coming and high costs associated with entering new markets, I think that the company’s shares are overvalued at this time and recommend selling or staying away from Angie’s List.

The article Competition and Lawsuits Are Among the Reasons to Avoid This Internet Company originally appeared on Fool.com and is written by Chris Katje.

Chris Katje has no position in any stocks mentioned. The Motley Fool recommends eBay. The Motley Fool owns shares of eBay. 

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.