-$1.00
$10.50
bear -$1.00
base $0.60
bull $10.50
margin of safety $2.00
market price* $6.20
Business condition attached to the margin of safety
No year-over-year revenue decline for two consecutive quarters, cash flow from operations after stock compensation and capital spending clearly positive, and a plan in place to repay or refinance the roughly $400 million of 3.875% notes due August 2028.
Angi runs an online marketplace that connects homeowners with local service professionals ("Pros") for repairs and home projects, under the Angi, Angie's List, HomeAdvisor and Handy brands. It earns money mainly by selling leads (connections between a homeowner and a Pro), plus advertising, memberships and pre-priced services. In 2025 about 88% of revenue came from the United States and 12% from Canada and Europe. Angi was spun off from IAC on March 31, 2025, and did a 1-for-10 reverse stock split on March 24, 2025; all per-share figures here are on the post-split basis. What the earnings really look like. We measure what an owner could take out of the business each year: cash from operations, less the cash effect of working capital swings, less stock compensation (treated as a real cost), less the capital spending needed just to stay in place. Revenue has fallen every year since 2022: $1,764 million in 2022, $1,359 million in 2023, $1,185 million in 2024 and $1,031 million in 2025. These figures exclude the roofing business, which was sold and is reported separately. Owner earnings per share on that basis were about -$1.36 in 2021 and -$2.31 in 2022 (years of heavy capital spending, up to $115 million in 2022), then $0.08 in 2023, $0.93 in 2024 and $0.81 in 2025. We treated the credit-loss provision ($48 million in 2025) as a real cost of doing business, netted against the growth in receivables, and we did not add back rent payments on leases. Amortization of acquired intangibles is small ($1.8 million in 2025), so the "wasting asset" concern is minor; the decline shows up in revenue instead. The anchor. We used 2023 through 2025 as the window, because it describes the business after the roofing sale (November 2023) and after the heavy capital spending of 2021 and 2022. Within it, 2025 was lifted by a one-time $10.2 million reversal of stock compensation (forfeited by Joseph Levin, now Executive Chairman, in the first quarter of 2025), so we treated 2025 at about $27 million rather than $38 million. The three years (about $4 million, $47 million and $27 million) have a median of about $27 million, or roughly $0.66 per share on the current 41.6 million diluted shares. That level no longer holds, though. In the first half of 2026 cash from operations was $9.3 million versus $54.0 million a year earlier, capital spending rose to $30.7 million from $24.8 million, and revenue fell 7% (the second quarter fell 11%, to $248.0 million). Our estimate of first-half 2026 owner earnings is about -$20 million, of which roughly $16 million reflects restructuring costs the company reported for the period. Two consecutive quarters of weaker results is enough for us to lower the starting level rather than lean on the older median. Growth-path reconciliation. Owner earnings fell about 20% in 2025 as reported (from $47 million to $38 million, or about 42% on the adjusted basis). Our base case has 2027 owner earnings of about $3 million, better than the 2026 run rate. The specific reason is that the first half of 2026 carried about $16 million of one-off restructuring costs that should not recur, and the 2025 cuts already showed that lower headcount reduces spending (U.S. sales and marketing compensation expense fell $73.9 million in 2025). We credit no revenue growth at all. Base case ($0.60 per share). Roughly break-even owner earnings in the second half of 2026 (about -$2 million), about $3 million in 2027, then shrinking about 5% a year, reflecting three straight years of falling revenue (2023 to 2025), a further fall in the first half of 2026, and a 19% drop in average monthly active Pros in 2025 (to 122,000). Nothing beyond that is credited: the "homeowner choice" change in January 2025 cut network (third-party website) revenue by 72%, but proprietary revenue grew 17% to $800.6 million in 2025, and in the second quarter of 2026 proprietary revenue was down about 10% and network revenue down about 34% from a year earlier. New products, AI initiatives and the January 2026 reorganization are not credited because they have not yet produced results in the reported numbers. Bear case (-$1.00 per share). Revenue keeps falling at about the recent pace, and the business keeps using cash: about -$5 million in the second half of 2026, -$10 million in 2027 and 2028, and about -$20 million in 2029 once the notes come due in August 2028 and must be refinanced at a higher rate than today's 3.875% (we assume roughly three points higher, about $12 million a year, on about $400 million). Cash was $188.7 million at June 30, 2026, so shareholders would not owe anything out of pocket, but in this case the operating business is worth less than nothing, by roughly $1 per share, because it burns cash that otherwise would belong to owners. Angi also relies on Google and other search engines for traffic, and its filing flags that changes in search and AI could hurt that traffic. Bull case ($10.50 per share). The network decline runs its course (only about $69 million a year of network revenue is left at the second-quarter 2026 rate, against $373 million in 2024), proprietary demand holds, and lower costs from the restructuring lift owner earnings to about $35 million in 2027, then drift down about 2% a year. Angi earned about $47 million in 2024 on $1.19 billion of revenue, so $35 million is below a level the business has already reached, but revenue would need to stop falling first. Balance sheet. Angi had $303.7 million of cash at the end of 2025 and $500 million of 3.875% notes due August 15, 2028. It spent $148.7 million buying back shares in 2025, and in the first half of 2026 it used cash to buy back part of the notes, leaving roughly $400 million outstanding and $188.7 million of cash. There is also an undrawn $175 million revolving credit facility. Debt is reflected only in the bear case, as the cost of refinancing. In the second quarter of 2026 Angi recorded non-cash write-downs of $225.6 million of goodwill and $9.6 million of other intangibles; these do not affect cash and do not change our figures. What would make this estimate wrong. On the downside, revenue falling faster than 11%, or a loss of search traffic. On the upside, a stabilization of proprietary revenue and a return to 2024-level earnings sooner than we assume. One figure could not be fully reconciled: our first-half 2026 owner earnings of about -$20 million is an estimate, because the detailed working-capital lines for that period were not available to us. The margin-of-safety price of $2.00 per share applies only once revenue stops falling and cash flow turns clearly positive; it is set with a large margin given the shrinking revenue and the 2028 debt maturity.