Our target price of $16 per share is based on an even weighting of our projected DCF ($15.7, using a 11.1% WACC and 3% terminal growth rate), 2026E EV/Revenue multiple (0.8x), and 2026E EV/EBITDA multiple (6.0x), relatively in-line with their 2-year EV/Revenue average of 1.0x but below EBITDA of 8.6x, which we justify given continued revenue headwinds and uncertainty. 

This stock is High Risk based upon our quantitative model, but assigning a High Risk rating is not supported by the company's fundamental and financial profile, in our view.

Downside risks to our target price include: 1) a prolonged economic downturn, particularly related to the residential real estate market, which Angi’s services have historically partially been tied to; 2) continued challenges to SEO, leading to less organic traffic and higher marketing spend; 3) continued optimization for profitable growth leads to extended headwinds to topline growth; and 4) increased competition from other platforms such as search engines, marketplaces, and social media sites.

Upside risks to our target price include: 1) growth headwinds are less pronounced and Angi returns to positive growth prior to its 2026 target; 2) With spun-out from IAC, this should  improve trading liquidity along with providing it more options on capital allocation to provide shareholder value; and 3) margins expand faster than expected given the cost rationalization undertaken, particularly if revenue sees faster-than-expected acceleration.