Does Angie's List CEO Change Affect Shareholders?

Wunderlich issued a company note on Angie’s List Inc (NASDAQ: ANGI) after the announcement that CEO Bill Oesterle is leaving the company. Wunderlich rates Angie’s List as Hold with a $6 price target.

Analyst Blake Harper wrote, “Angie's List announced that CEO Bill Oesterle is departing after 20 years with the company and 16 years as the CEO. He oversaw tremendous growth of the business in terms of revenues, service provider advertisers, and members, but the company struggled to generate sustained profitability.

"Many investors became frustrated with the company's insistence on a consumer subscription model, while competitors grew rapidly with transaction-based marketplaces, and we would expect many to view as a positive development the chance for a new executive to lead the company at this point.”

Wunderlich believes that e-commerce is pivotal to the company’s profitability as more efficient operations and marketing spending will lower operating expenses. Wunderlich expects Angie’s List to report in-line revenues for the first quarter, while focusing on the e-commerce marketplace. Angie’s List has over three million subscribers and millions of user generated reviews which make the company an attractive acquisition target, according to Wunderlich.

Shares of Angie's List traded recently at $5.63, down 5.4 percent.

A recent article on Benzinga noted that Angie’s List is facing increased competition from competitors such as Amazon.com, Inc. (NASDAQ: AMZN).

"Wunderlich analysts gave Amazon the advantage on its marketplace model, merchandising and customer service, while giving Angie's List the edge on reviews; however, the analysts warned that Amazon could 'catch up.'

"The analysts noted that future growth and profitability will be dependent on Angie's List's platform and profitability, which have yet to see strong 'demand from consumers.'"