Why Angie's List (ANGI) Was Downgraded

NEW YORK (TheStreet) -- Bank of America/Merrill Lynch downgraded Angie's List (ANGI) to "neutral" from "buy" Wednesday.

Angie's List lost 5.1% to $17.89.

The bank set a price target of $22 for the company. Analyst Paul Bieber said the downgrade is because Street EBITDA estimates are too high for Angie's List. He notes that shares of the company are up 24% in the past year, and that he expects in-line fourth-quarter results.

"We estimate 2014 EBITDA of $10.8mn vs. the Street at $21.2mn, and we estimate 2015 EBITDA of $37.2mn vs. the Street at $64.5mn," Bieber wrote. "The company is improving profitability at a pace of $25-30mn a year, and the Street seems to be modeling an accelerating pace."

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