Should Investors Buy, Sell or Hold ANGI Stock Before Q3 Earnings?

Core Viewpoint - Angi Inc. is expected to report a decline in revenues and mixed earnings results for the third quarter of 2024, reflecting ongoing challenges in user engagement and service requests [3][6][7]. Revenue Estimates - The Zacks Consensus Estimate for revenues is $295.9 million, indicating a 20.42% decline year-over-year [3]. - Domestic Ads and Leads revenues are estimated at $240 million, reflecting a 17.8% year-over-year decline [6]. - Domestic Service revenues are projected at $23.94 million, showing a 20.2% decline year-over-year [7]. - International revenues are expected to be $32.04 million, indicating a growth of 9.4% year-over-year [10]. Earnings Estimates - The earnings estimate is pegged at breakeven, an improvement from a loss of 1 cent in the same period last year [3]. - Angi delivered an earnings surprise of 200% in the last reported quarter, with an average surprise of 129.17% over the trailing four quarters [4]. Operational Factors - The company's performance is impacted by lower service requests and a reduction in sales and marketing spend, which may have affected user experience enhancements [6]. - Angi has optimized its sales force to improve retention and service quality, which is expected to drive profitability in the long term [7]. - The integration of online enrollment for service professionals aims to attract high-quality professionals and reduce acquisition costs [8]. Market Performance - Year-to-date, Angi's stock has returned 1.6%, underperforming the Zacks Computer and Technology sector's return of 28.5% [11]. - The stock trades at a forward 12-month P/S ratio of approximately 1.06, indicating a discounted valuation compared to the broader Zacks Internet - Content industry [13][14]. Strategic Outlook - Angi operates in the growing home services marketplace, with a focus on service provider subscriptions and consumer connection fees [15]. - The shift towards a fixed-price services model could enhance monetization, although margin pressures remain a concern [15]. - Key metrics to monitor include service provider acquisition costs, user engagement rates, and stability of the take rate [15]. Conclusion - Given the ongoing operational transformation and market uncertainties, a cautious approach is recommended, with a focus on fixed-price services growth and consumer demand trends [17].