Barrington Research maintained an Outperform rating on Angie's List (NASDAQ: ANGI) but lowered its price target to $10.00 (from $15.00). Comment's follow weak Q3 results and guidance. Analyst Jeff Houston sees the stock as an attractive target and he sees opportunity in today's sell-off.

"With the stock down 18% today, it is giving back much of the increase that it enjoyed from the recent "shopping itself" rumor, which management neither confirmed nor denied on the call. We think that private equity is a more likely near‐term buyer than strategic alternatives (e.g., Alibaba, eBay, Google, and Yelp) given the operational issues it is working through. Also fueling the selloff, 23.5% of float was short as of 9/30/2014," said Houston.

"The company is transitioning to a marketplace where 75% of revenue is generated by SPs and 25% by member subscriptions, which requires a change in its sales strategy and fine‐tuning of its product. Still, the company is poised to improve profitability significantly in 2015, which is underappreciated by investors, driven by the higher percentage of SP revenue generated by renewal contracts that carry an 80‐85% profit margin, dramatically higher than first-year‐contract margins of 0‐5%. We also like Angie’s revenue visibility, differentiated offering, ability to increase advertising prices, operating leverage, and new monetization initiatives (i.e., $10‐15 billion of transactions and non‐paying SPs). Furthermore, valuation is attractive with a 2015 EV/Revenue of about 0.9x and it is a takeout candidate, in our opinion," he added.

For an analyst ratings summary and ratings history on Angie's List click here. For more ratings news on Angie's List click here.

Shares of Angie's List closed at $8.28 yesterday.