Shares of home services online marketplace ANGI (NASDAQ: ANGI) fell 16.2% in the morning session after the company reported second quarter results, which missed analysts expectations for revenue and earnings per share. The decline in its user base was also concerning, and total service requests (a key measure of volumes on the platform) missed badly. Also, its revenue growth was quite weak. Overall, it was a weaker quarter for the company.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Angi? Access our full analysis report here, it's free.
What is the market telling us:
Angi's shares are quite volatile and over the last year have had 53 moves greater than 5%. But moves this big are very rare even for Angi and that is indicating to us that this news had a significant impact on the market's perception of the business.
The previous big move was three months ago, when the stock gained 8.43% on the news that the company reported first quarter results that exceeded analysts' revenue, adjusted EBITDA, and earnings per share (EPS) estimates. The company generated positive free cash flow after several quarters of cash burn. However, there was a decline in users and the revenue growth was somewhat weak. For the full year, the company guided adj. EBITDA ahead of Consensus.
While it wasn't a perfect quarter, it was certainly a good one, with the improved profit outlook a major positive for the market's perception of the business.
Angi is up 14.9% since the beginning of the year, but at $2.86 per share it is still trading 53.5% below its 52-week high of $6.14 from August 2022. Investors who bought $1,000 worth of Angi's shares 5 years ago would now be looking at an investment worth $156.70.
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