Stock in Angie’s List Inc. on Thursday morning rose the most since the Indianapolis-based company's shares began trading almost a year ago.
The shares climbed more than 30 percent, to $11.85 each, in the first 70 minutes of trading Thursday for the biggest intraday gain of its stock since Nov. 17, 2011. Through Wednesday, the stock had lost 44 percent this year.
The stock ended Thursday at $11.56 per share, an increase of 27 percent on the day.
The gains came a day after the company reported sales that beat estimates as more members paid to use the service.
Angie’s List raised $114 million in an initial public offering last November after pricing shares at $13 apiece, the top of the proposed range, and held a secondary offering May 15.
On Wednesday, the company posted a wider loss in the third quarter due to hefty advertising spending, but succeeded in attracting hundreds of thousands of new subscribers to its online business ratings and reviews, boosting revenue by 75 percent.
Angie's List said that its total paid memberships increased 68 percent, to 1.66 million, for the period ended Sept. 30. Paying customers get access to consumer ratings on everything from local plastic surgeons to sewer cleaners. The company's revenue increased 75 percent, to $42 million. However, that gain was partially offset by higher selling and marketing expenses.
Angie's list reported a quarterly loss of $18.5 million, or 32 cents per share, compared with a loss of $17.4 million, or 66 cents per share, in the prior-year period. The larger per-share loss in last year's quarter reflects that the company had fewer shares outstanding before going public last November.
Analysts polled by FactSet expected losses of 33 cents per share and revenue of $41.3 million.
"We look forward to continued growth in the fourth quarter," Bob Millard, Angie's List chief financial officer, said in a prepared statement. "Based on normal seasonal trends, we will scale back on our marketing investment in the fourth quarter."
Marketing expenses in the third quarter grew 39 percent as the Indianapolis-based company continued promoting its website and trying to sell its services. The company reported that 76 percent of first-year customers renewed their membership. Angie's list requires visitors to subscribe to see its A to F ratings on businesses that are submitted by consumers. The annual fees range from $28.50 to $46.
Looking ahead, Angie's List forecast fourth-quarter revenue in the range of $45 million to $46 million, in line with analysts' estimates.
Angie’s List has not posted a profit since founded in 1995 and last year lost $49 million.
Company management and analysts nevertheless have said Angie's List is on track to be profitable by 2014 as it builds critical mass in national markets.