NEW YORK (TheStreet) -- Shares of Angie's List (ANGI) are dropping 1.61% to $6.13 in Tuesday's early morning trading session after analysts at Topeka Capital Markets initiated coverage of the company with a "hold" rating and a price target of $7.
Angie's List is an online provider of reviews of local businesses and services.
While the company has valuable information and user-generated reviews on local service providers, consumer subscription model and high marketing spend has reduced potential earnings leverage, analysts said.
Additionally, "We believe a new CEO could revitalize the business model to increase the level of e-commerce on the platform but the company has an intensifying amount of competition including well-funded private competitors," according to the analyst note.
Before the stock rewards investors, analysts noted that Angie's List must produce more sustainable operating results.ANGI data by YCharts