We came across a bullish thesis on Angi Inc. (ANGI) on Substack by Michael. In this article, we will summarize the bulls’ thesis on ANGI. Angi Inc. (ANGI)’s share was trading at $1.57 as of March 14th. ANGI’s trailing and forward P/E were 22.50 and 10.03 respectively according to Yahoo Finance.
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ANGI, a publicly traded company currently 85% owned by IAC, is set to be spun off to IAC shareholders on March 31, 2025. The stock has suffered a massive 92% decline from its 2018 peak, with double-digit revenue declines in both 2023 and 2024, exacerbated by recent FCC regulations impacting its lead aggregation business. At first glance, ANGI appears deeply troubled, but a closer examination reveals a compelling turnaround story backed by strong insider commitment and a credible path to profitability. Joey Levin, IAC’s CEO, will assume the role of ANGI’s executive chairman post-spin-off, reinforcing confidence in the company’s recovery. Levin, who owns 5 million shares, has firsthand experience leading ANGI as interim CEO from 2022 to 2024 and will work alongside CEO Jeff Kip, who successfully managed ANGI’s international operations since 2016. Their leadership signals a determined effort to stabilize and grow the business.
ANGI’s core model revolves around connecting homeowners with contractors, charging a fee for each lead. However, past management’s aggressive expansion efforts led to margin deterioration, culminating in negative operating margins of -5% by 2022. This prompted a leadership overhaul and a shift toward profitable growth. The recent FCC regulations have reshaped ANGI’s lead generation strategy, requiring explicit homeowner consent before sharing contact details with contractors. While this initially caused a revenue drop of over 20%, it has enhanced lead quality, strengthened contractor relationships, and improved pricing power. As a result, ANGI is positioned to emerge from this transition with a more sustainable and profitable model.
Looking ahead, ANGI’s turnaround strategy includes cost discipline, reduced stock-based compensation, and a pivot to high-quality lead generation. While revenue is expected to bottom between $920-950 million in 2025, the company projects a return to high single-digit to low-teens revenue growth (8-12%) from 2026 onward, supported by positive cash flow and improving profitability. By 2028, ANGI aims to achieve 8-10% operating margins, bringing it in line with other successful aggregators. If it meets these targets, ANGI could generate $1.3 billion in revenue and $200 million in EBITDA, translating to a potential doubling or tripling of its current valuation at a conservative 8-10x EBITDA multiple. Opportunistic share buybacks, which could reduce the share count by 15-20%, further enhance the upside.
Following the spin-off, ANGI’s post-separation balance sheet will include $416 million in cash and $500 million in bonds, ensuring financial stability. However, the spin-off structure means IAC shareholders will receive ANGI shares incidentally, which could result in significant selling pressure in the months following. If this leads to a steep decline, ANGI could temporarily trade as low as $1.20 per share, creating an attractive entry point for investors willing to look past its turbulent history. The key thesis hinges on management’s ability to execute its turnaround plan, and with Joey Levin’s leadership and strong insider alignment, ANGI represents a volatile yet highly asymmetric investment opportunity.
Angi Inc. (ANGI) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 16 hedge fund portfolios held ANGI at the end of the third quarter which was 14 in the previous quarter. While we acknowledge the risk and potential of ANGI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ANGI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.