What happened
Shares of Angi (ANGI 35.22%) were bouncing higher last month after the home-services marketplace posted a strong update for August in its monthly key metrics report. The company also seemed to benefit from a short squeeze the following week, though that was short-lived. According to data from S&P Global Market Intelligence, the stock finished the month up 16%.
As you can see from the chart below, the stock gained in two separate stages before pulling back at the end of the month.
So what
To give investors a clearer window into the trajectory of the business, Angi has been reporting monthly performance metrics like revenue growth in monetized transactions since the start of the pandemic. In August, the company posted 21% overall revenue growth, its fastest pace since April when it benefited from lapping the slower months during the pandemic a year ago. Marketplace revenue was up 24% at the e-commerce company, another positive sign, which came even as monetized transactions were down 13%. That could be a sign that revenue from Angi Services, its pre-priced offering that sells directly to homeowners, is accelerating.
Image source: Angi.
The stock rose 9.1% after that news came out. Shares continued to rally from there in an apparent short squeeze as the stock jumped 18% over a two-day period the following week on high volume before giving back those gains. Currently, 12% of the stock is sold short, indicating that there is a substantial number of bearish bets on the stock.
Now what
Angi is in the midst of a transition after bringing in a new CEO in February, Oisin Hanrahan, the founder of Handy, and launching a rebrand in March. Angi Services is emerging as the company's primary growth driver and has the potential to transform the company. It also introduced a membership service, Angi Key, which offers benefits, including 20% discounts on all pre-priced services for $30 per year, which help it build a loyal customer base.
We'll get a better sense of whether the August acceleration was sustainable when the company reports third-quarter earnings a month from now.
