Why are analysts suddenly upgrading Angi (ANGI) despite its revenue drop—is this the ultimate turnaround play?

**Analysts are not yet upgrading Angi (ANGI) despite its revenue drop, but they are adjusting their expectations and price targets based on the company's strategic shifts and improved profitability.** Here's a detailed analysis:

1. **Improved Profitability**: Angi reported a 228.6% EPS growth to $0.23 and a 166.6% increase in net income to $10.90 million in Q2 2025. This substantial increase in profitability indicates improved cost controls and operational efficiencies, which is a positive sign for investors.
2. **Strategic Shifts**: Angi has been focusing on cost discipline, platform modernization, and strategic shifts to improve lead quality and price optimization. These efforts are aimed at stabilizing margins and improving the overall quality of its service requests and leads.
3. **Market Position and Future Potential**: Despite the revenue decline, Angi's proprietary service requests and leads have grown for the first time since Q1 2021, reflecting the success of its strategic investments in high-quality service professionals. This growth is a positive indicator for future market share gains and revenue potential.
4. **Analyst Sentiment**: Analysts have adjusted their expectations, with some raising price targets, such as Truist Securities increasing its target to $28 from $25 and UBS raising its target to $22 from $20. However, this does not necessarily constitute an upgrade, and the sentiment remains cautious due to the revenue contraction and macroeconomic headwinds.
5. **Financial Outlook**: Angi has raised its full-year forecast, expecting a revenue decline of 11% to 13% in 2025, which is an improvement from the previous forecast of 12% to 16%. This adjustment reflects a more optimistic view of the company's ability to weather the current economic conditions and position itself for future growth.

In conclusion, while analysts are acknowledging Angi's strategic moves and improved financial performance, they are still cautious due to the ongoing revenue decline and macroeconomic challenges. The ultimate turnaround play will depend on Angi's ability to sustain and build upon its recent improvements in profitability and market position.