1-Star Stocks Poised to Plunge: Angie's List?

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, local services review site Angie's List (NAS: ANGI) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Angie's List and see what CAPS investors are saying about the stock right now.

Angie's Listfacts

Headquarters (founded)Indianapolis (1995)
Market Cap$636.7 million
IndustryInternet software and services
Trailing-12-Month Revenue$90.0 million
ManagementCo-Founder/CEO William Oesterle
Co-Founder/Chief Marketing Officer Angela Hicks
Trailing-12-Month Operating Margin(49%)
Cash/Debt$88.6 million / $14.8 million
CompetitorsCityGrid Media
Shopping.com
Yelp

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96% of the 233 members who have rated Angie's List believe the stock will underperform the S&P 500 going forward.

Late last month, one of those Fools, gameguru, succinctly summed up the bear case for our community:

I'm an Angie's list subscriber, and I find a lot of value in their service (both the reviews and coupons). However, this is NOT a business built for big profits. It is more akin to Consumer Reports than to any of the social media companies it has been lumped in with. ... Sure, there appears to be huge room for growth (what if they covered every city with over 100,000 population?), but it is unlikely they would get enough subscribers to make it worthwhile in these smaller areas, so their user base is ultimately limited.

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At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies 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 Fool's disclosure policy always gets a perfect score.

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