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Bear of the Day: Angi Inc. (ANGI)

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Angi Inc. (ANGI - Free Report) is a technology company headquartered in Denver, Colorado. It connects users with repair, remodeling, cleaning, and landscape professionals that match your service needs and desired price range. Users can also request and compare quotes so that they can get the best price for their home projects.

Q2 Earnings Recap

Revenue grew $12% year-over-year to $421 million but missed the Zacks Consensus Estimate of $424 million.

Net loss came to $30.3 million, or $0.06 per share, compared to net income of $12.7 million, or $0.02 per share, in the year-ago quarter. Our consensus estimate was calling for a $0.03 loss per share.

Adjusted EBITDA fell to $4.4 million during the period.

Net cash from operation fell to $59.3 million for the six months ended June 30, while free cash flow decreased almost $80 million to $23.5 million.

The company also announced that it repurchased 700,000 shares at an average price of $11.71 a piece between May 7 and August 3.

Bottom Line

ANGI is now a Zacks Rank #5 (Strong Sell).

Four analysts have cut their full year earnings outlook over the past 60 days. ANGI’s bottom line is expected to decline 1.36% year-over-year, and the consensus estimate has fallen $0.05 to a loss of $0.15 per share for fiscal 2021. Next year’s earnings consensus has dropped as well, and Wall Street now expects earnings to be in the red.

Shares have been volatile so far in 2021. Year-to-date, ANGI is down 21.4% compared to the S&P 500’s gain of roughly 19%.

Looking ahead, things may continue to be rocky for Angi as it straightens the kinks out of its rebrand initiative; the company wants to focus more on shoring up the Angi brand while deemphasizing and pulling back spending on the HomeAdvisor brand.

But because of the hot housing market as well as the Covid-19 pandemic, Angi continues to benefit from consumers looking to invest in home-improvement projects; however, some professionals and contractors are struggling to find day labor, which has lead to supply pressure for Angi.

Until the outlook for management’s rebrand strategy improves, potential investors may want to wait on the sidelines.

Those who are interested in adding an internet stock to their portfolio could consider Airbnb (ABNB - Free Report) . ABNB is a #2 (Buy) on the Zacks Rank. Three analysts have raised their earnings outlook for the current fiscal year, and earnings are set to soar over 87% year-over-year.

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