Angi (ANGI) – A Greenblatt-Style Spin-Off with Hidden Leverage and Insiders Betting Big

A Turnaround Story Hiding in Plain Sight

Price: $16.00 

Market Cap: $800 million 

EV: $911 million 

Shares: ~50 million diluted

Thesis: A misunderstood, insider-backed transformation story with self-inflicted wounds behind it and operational leverage ahead. We believe Angi is positioned to grow earnings meaningfully starting in 2026 — and the market hasn’t caught on.

I. Overview

Angi runs the largest digital home services marketplace in the U.S., connecting homeowners with plumbers, electricians, roofers, and other local pros. After years of bloated spending and shaky growth, the company’s been rebuilt from the ground up — led by two insiders, most notably Joey Levin, who left his role as IAC CEO to become Executive Chairman of Angi.

It’s a move that echoes a classic Joel Greenblatt insight from You Can Be a Stock Market Genius: in the Host Marriott spin-off, the executive who designed the transaction — Stephen Bollenbach — chose to go with the "bad" asset. That signaled hidden value. Levin’s decision feels like a modern version of the same play.

II. History & Corporate Lineage

Angi was created by IAC in 2017 via the merger of Angie’s List and HomeAdvisor. But for years, it operated with two brands, two tech stacks, and two separate sales forces. The result? A clunky product experience that frustrated both homeowners and service pros.

Worse yet, the business depended on "automatched" leads — meaning pros got charged whether or not the homeowner wanted to work with them. This model led to churn, poor conversion, and low satisfaction. By 2022, EBITDA had collapsed from ~$260M to ~$35M, CapEx ballooned to $115M, and sentiment was deeply negative. The stock responded accordingly.

III. The Problem: Why Angi Looked Broken

To most investors, Angi looked like a melting ice cube. Revenue was falling, competitors were gaining ground, and there seemed to be no plan. But the real problem ran deeper: Angi had spent years monetizing low-quality transactions at the expense of long-term trust. The automatch model was corrosive to both sides of the marketplace. Eventually, leadership saw it for what it was — and started tearing it out.

IV. The Inflection – What Changed

Levin stepped in directly in 2022, took over as interim CEO, and began fixing the core product. In 2024, IAC spun off Angi — and Levin made the rare move of leaving IAC entirely to lead Angi as Executive Chairman. He brought in Jeff Kip as CEO, the same operator who had already simplified Angi’s international business and materially improved margins.

The overhaul in the U.S. followed quickly:

• Automatched leads (~40% of volume) were scrapped

• Homeowner Choice was introduced — now only pros selected by the homeowner are charged

• A unified pro platform is being rolled out by Q3 2025

• AI-powered job intake improves classification and matching

And it’s working:

• Homeowner NPS has climbed ~30 points (from –30 to ~0)

• Job completion rates — the percentage of requests that lead to a hire — are up ~30%

• Pro LTV is up 150% year-over-year, despite 41% fewer new pros added

• Revenue per lead is expected to rise starting in Q2 2025, as better matching drives more value

V. What the Market Is Missing

The market still sees a struggling lead-gen business. The Q1 2025 headline number — $245.91M in revenue, down 19.5% year-over-year — looks ugly on its face. But context matters — and this is where the market is missing the entire story.

• The drop was driven almost entirely by a 57% decline in network leads, which are third-party sourced — traffic Angi buys from external partners. These leads tend to be lower intent, less qualified, and churn-heavy under the legacy automatch model, and they accounted for roughly 20% of total lead volume pre-reset.

Proprietary leads, by contrast, come from Angi’s owned-and-operated platforms — the Angi app and website. These leads are exclusive, higher-intent, and represent roughly 80% of lead volume. They convert at higher rates and are far more valuable to service pros.

Proprietary leads were nearly flat year-over-year, but grew sequentially every month in Q1 — which means, without them outright saying it, that March was already positive. In other words, the trough for proprietary — which makes up roughly 80% of the business — has already passed as of the last month of Q1 (i.e., the most recent data we have).** — which strongly suggests that March was already back to positive growth from here on out.

This is the crux of the hidden turnaround: despite the headline revenue drop, the engine underneath is already beginning to accelerate. The company isn’t waiting for a recovery — it’s already in one. Management just hasn’t reported a clean quarter yet to prove it.

The reason is simple: the reset was deep and fast. It slashed low-quality volume, hurting top-line optics. But what’s left is far healthier, and already improving month by month.

So while proprietary lead growth and rising revenue per lead (RPL) are both trending positively — and starting from a cleaner base after the Q1 reset — total revenue may still decline year-over-year in Q2. That’s because the ongoing decline in network leads, which still make up ~20% of the business, will continue to drag on the overall top line. However, this drag is expected to decelerate throughout 2025. By 2026, as proprietary momentum compounds and the network headwind fades, total revenue growth should turn meaningfully positive.

The steep revenue decline into Q1 2025 was driven almost entirely by the collapse in low-quality network leads. That’s the red area in the chart — now largely flushed out. Proprietary leads (green) held steady and are beginning to grow. With network revenue stabilized and proprietary momentum building, the black line — total revenue — is set to inflect upward through 2025 and into 2026. The turnaround has already begun; it just hasn’t hit the GAAP line yet.

The formula for resuming growth by 2026 is straightforward:

• Flat network volume (off the new, lower base)

• Growth in proprietary volume

• Growth in revenue per lead

This reset is now complete. And the economics are shifting fast.

Each lead is becoming meaningfully more valuable. Better targeting and the move to Homeowner Choice means that leads are now far more likely to result in a hire — which dramatically increases the return on investment for service pros. This doesn't just improve satisfaction and retention on both sides of the marketplace; it materially lifts revenue per lead. As conversion rates rise, each lead becomes more monetizable — and Angi’s take per match can grow without having to increase volume or pricing pressure.

Leads are converting at higher rates. Pros are choosing the jobs they want. Homeowners are happier. With better targeting and improved match quality, revenue per lead is starting to rise — and that’s the key.

At the May 2025 JPMorgan conference, CEO Jeff Kip said:

“Virtually all of our revenue decline was the drop in network leads… Our revenue per lead was in decline fairly significantly in the back half of last year. That’s now stabilized and we’ve said it’s going to grow.”

He went on:

“Flat network plus growth proprietary plus growth in revenue per lead usually equals growth.”

This is a turnaround already in progress — it just hasn’t hit the GAAP line yet.

In short: we’ve already hit bottom. It just isn’t obvious yet.

Here’s where things stand:

• Network lead volume has stabilized

• Proprietary leads are growing

• Revenue per lead is improving as trust in the platform rises

That sets the stage for growth to resume in 2026. Service requests are increasing, revenue per SR is rising, and Angi doesn’t need to ramp pro acquisition to grow — which means more flow-through to margins and free cash flow.

International markets show what’s possible: hire rates abroad are 50%+ higher, and recent U.S. cohorts are following the same pattern. There’s a clear roadmap.

The AI rollout only sharpens this momentum. A conversational interface makes it easier for homeowners to explain their projects, which leads to better matching, more conversions, and happier pros. CEO Kip calls this “Agentic AI” — Angi as the agent, not just a middleman.

VI. Financials & Valuation

• Market Cap: $800M

• Enterprise Value: $911M

• 2025E Adj. EBITDA: $135M–$150M

• CapEx: ~$50M

• SBC: ~$30M

• → Normalized FCF (midpoint): ~$62.5M

That puts Angi at ~15x 2025 FCF — but these are trough numbers.

By 2026, EBITDA less CapEx and SBC could reach ~$80M. That would bring the forward multiple down to ~12x. If we put the same 15x multiple on our 2026 numbers of $80m FCF that's 50% up from here already. 

With the reset behind them and no reinvestment needed, that’s a compelling setup — especially with proven comps abroad.

VII. Risks

• Google remains a real threat via Local Services Ads

• SEO headwinds continue, though Angi has adapted through paid channels

• Pros often use multiple platforms, which limits platform exclusivity

That said, Angi doesn’t need to "win" the entire market. As hire rates and ROI improve, it becomes a more valuable piece of the toolkit for service pros — not a zero-sum game.

VIII. Insider Alignment

Insider incentives here are unusually strong:

• CEO Jeff Kip holds 445,000 performance share units (post-split) — worth about $7.2 million at today’s price of $16.14. But they don’t vest unless the stock hits $45, $60, $80, and $100, and he stays in the role through 2034. Until then, they’re upside optionality.

• Executive Chairman Joey Levin forfeited $129 million in unvested IAC stock and received $9.3 million in cash and 500,860 Angi shares (worth ~$8.1 million today), locked up until 2031. Even if Angi 10x’s, he likely ends up behind where he would’ve been at IAC. That makes his move more likely about lifestyle than pure economics.

IX. Conclusion

Two experienced insiders have reshaped the company. The revenue decline was self-inflicted and is nearly behind them. Proprietary leads are growing. Revenue per lead is turning. And the entire platform is structurally better.

Just like Greenblatt’s bet on Host Marriott, when the person who engineered the spin picks the unloved asset — and ties their entire upside to it — you’d be smart to take notice.

We think that’s exactly what’s happening here.

X. What the Insiders Might See

So what made Joey Levin walk away from $129 million in IAC equity to take this spin-off?

He likely saw the scale of the opportunity.

Today, Angi is the largest player in home services — yet it holds less than 2% of the market. For comparison, Booking and Expedia control about 40% of online travel.

Home services is more complex, sure. But Kip believes Angi can reach 5–10% share over time — a 3x to 5x increase.

He put it simply:

“If I could go from 1.5 to 6 [percent share] in 5 or 8 years, that would imply a pretty impressive level of growth... There’s real opportunity there.”

That’s not just theory — it’s grounded in evidence. International markets are growing in the mid-teens. Hire rates are significantly better abroad. The U.S. business is now following the same script: cleaner leads, higher trust, and stronger retention.

What would happen if they could achieve their ultimate goals ? 

At today’s 2% market share, Angi will generate about $1 billion in sales and produce $60 million in free cash flow. Assuming FCF scales linearly with market share, a constant 15x FCF multiple, and 50 million shares outstanding, the chart above shows where the stock could go if Angi reaches 5–10% share in a few years — management’s stated ambition. That implies a potential share price of $45 to $90 — 3x to 5x upside from current levels.

This is what Levin likely saw:

A category leader in a fragmented space, with rising conversion rates, margin leverage, proven comps, and just 2% market share today.