ANGI Homeservices Inc (NASDAQ:ANGI), which was formed when Angie’s List merged with HomeAdvisor, is the leader in the home services industry. The company has ties to several mega-trends that I expect will easily outpace the broader market growth in the years ahead.
I think the biggest draw is the millennials, who are finally starting to buy more homes with family formation on the rise. Owning a home is great, and this younger demographic becoming first-time homebuyers is fantastic for the economy. But one of the biggest downsides of being a homeowner is that there are constantly repairs and upgrades that need to be done — trust me, I know this firsthand.
The millennial generation is all about technology and ease of use, and that’s exactly what ANGI provides. While older generations may be hesitant to search for home professionals online, the millennials are more than comfortable checking out online reviews and booking services to get the help they need.
Another theme that ANGI plays a role in is the expansion of the housing market. Of course, there will be monthly ups and downs as interest rates continue to rise, but overall, the trend is higher and with more homeowners will come increased demand for home improvement.
ANGI Stock: Great Long-Term Buying Opportunity
Fundamentally, the company is expected to return to profitability this year with earnings of $0.34 a share. Strong bottom-line growth will take that figure to $0.47 a share in 2019 and on a steady rise to $1 in 2022. However, I think those predictions underestimate the upside potential of this market leader and that the stock is more fairly valued in the $20 area by the end of this year. That suggests 42% of headroom from current prices.
The recent market sell-off has pushed ANGI stock back to its old breakout level (the black line) — which is now acting as support — after breaking out to a multi-year in February. With the stock sitting just above price support and on its 50-day moving average (the blue line), this is presenting a great buying opportunity.
Add in the bullish volume and extremely oversold relative strength index (RSI, at the bottom of the chart) and you’re left with a great pick for the long-term.
The sharing economy is the present and future of our world and ANGI is a leader in a sector that will only continue to take market share from the traditional home improvement space.
Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of FUTR Stocks and the ETF Bulletin. Matt just launched two new investment advisories focused around the “next” generation investing theme. His trademark three-prong investing approach targets the mega-trends old Wall Street is missing out on. Click here for more information on the “NexGen” Experience.