Angi (ANGI) Faces Crucial Earnings Test: Can the Turnaround Continue?

Investors in Angi Inc. (ANGI) are preparing for a pivotal moment as the home services platform reports its Q1 2025 earnings after market close on May 6. The results will offer critical insights into whether the company’s efforts to stabilize its business and achieve profitability are bearing fruit—or if it remains stuck in a slow-growth rut. With shares trading near 52-week lows and a debt-heavy balance sheet, the stakes are high. Here’s what to watch.

The Numbers Under the Microscope

Analysts expect Angi to report an adjusted EPS loss of -$0.06 for Q1 2025, a marginal improvement from -$0.05 in the same quarter last year but a stark contrast to its Q4 2024 performance, when it beat estimates with a $0.10 EPS. Revenue is forecasted to drop 21.5% year-over-year to $239.7 million, reflecting ongoing challenges in its core business.

While the top-line decline is steep, recent quarters have seen renewed optimism, with consensus EPS estimates rising 14% in April amid signs of cost discipline and margin improvements. The company’s long-term goal—to shift from a loss-making enterprise to a profitable one—depends on sustaining this momentum.

The Path to Profitability—and the Hurdles

Angi’s turnaround hinges on two factors: stabilizing revenue and managing its debt. Despite the Q1 revenue slump, analysts project revenue to grow 1.2% annually, reaching $1.07 billion by 2026—a modest rebound from its current trajectory. The company has been aggressively cutting costs, with operating expenses dropping 35% year-over-year in Q4 2024. If this trend continues, it could tip Angi into profitability sooner than expected.

However, risks linger. Angi’s debt-to-equity ratio remains elevated at 2.4x, and its net income for 2024 was negative $40.9 million. While cash flow has improved, investors will scrutinize management’s plans to reduce leverage. Additionally, the company’s strategic initiatives, such as expanding into high-growth markets like HVAC and plumbing, must deliver measurable results.

Analyst Sentiment: Caution Amid Hope

Analyst recommendations are mixed but leaning cautiously optimistic. The average price target of $24.39 implies a 20% upside from current levels, though this hinges on execution. Notably, one analyst has a $60 price target, suggesting belief in Angi’s long-term potential. Yet, the low end of the range ($13) underscores lingering skepticism about its ability to compete in a fragmented industry dominated by entrenched players.

What’s at Stake for Investors?

The Q1 report will test whether Angi’s cost-cutting and revenue diversification strategies can offset its struggles in core markets. A beat on EPS or a clearer path to positive net income could rekindle investor confidence, potentially triggering a rally. Conversely, a miss or weak guidance could amplify concerns about its debt and slow growth.

Long-term, the company’s valuation—trading at just 0.6x sales—suggests the market has little faith in its future. To justify a higher multiple, Angi must demonstrate consistent margin expansion and top-line stabilization.

Conclusion: A Turnaround in Progress, but Fragile

Angi’s Q1 results are a litmus test for its turnaround story. With an EPS loss narrowing to -$0.06 and cost discipline improving, the company is on track to achieve its 2025 EPS target of $0.05, a symbolic step toward profitability. However, its 21.5% revenue decline and industry-wide headwinds underscore the fragility of this progress.

Investors should prioritize clarity on two metrics: free cash flow generation and revenue mix shifts (e.g., growth in high-margin services). If Angi can stabilize revenue while reducing debt, its stock could rebound. But with peers like HomeAdvisor and Thumbtack vying for dominance, execution will be everything.

In the end, Angi’s future hinges on turning its operational improvements into sustained growth—a challenge that will become clearer in the coming days.