What happened
Shares of ANGI Homeservices (ANGI) surged last month as the company bounced back from big losses in March and got an assist from an analyst upgrade. The gains in April came in spite of the company reporting an operating loss for the first quarter and pulling its financial guidance for the year. According to data from S&P Global Market Intelligence, the stock finished the month up 29%.
So what
ANGI stock dipped on April 7, hitting a new low after majority owner IAC/InterActiveCorp (IAC) updated investors in a shareholder letter, acknowledging that ANGI was experiencing some headwinds related to COVID-19. "ANGI Homeservices has felt the demand for home repair, maintenance, and new projects drop as the world shelters in place," said CEO Joey Levin of IAC. He added that although demand had dropped off considerably, the company was seeing an increase in service providers joining the platform.
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The following day, the stock soared 17.5% when it got an upgrade from Citigroup analyst Nicholas Jones, who lifted his rating to buy from neutral, and said that the stock price reflected a more challenged 2021 than he expected, though he acknowledged that there were "tough times ahead" for the company.
The following week, ANGI stock pulled back after the company released preliminary first-quarter earnings figures. It finished the quarter with revenue in the range of $340 million to $345 million, below guidance at $355 million to $370 million, while adjusted EBITDA came in at $30 million to $35 million, which was in line with expectations. It also expected an operating loss of $15 million to $20 million for the quarter, worse than prior guidance of $10 million to $15 million. CEO Brandon Ridenour said, "We are in a strong position to navigate these unprecedented times," referring to the company's $384 million in cash and equivalents, flexible business model, and status as an essential service.
Now what
ANGI will report its full first-quarter earnings results after hours on Wednesday, with analysts expecting it to turn in an adjusted per-share loss of $0.03 after a per-share profit of $0.02 a year ago. While we already know the key numbers for the quarter, investors will want to keep an eye on growth in service providers, since demand for services on the company's marketplace has historically outstripped supply, as well as comments on the performance of the business and its future in light of COVID-19.
