Research Update: Angi Inc. Downgraded To 'B+' On Weaker Credit Metrics Due To Declining Profitability; Outlook Stable

Denver-based home services digital marketplace company Angi Inc. reported weaker EBITDA margins than we expected through the first half of 2021 given increased marketing expenditures from its rebranding efforts, and operating expenses tied to growth in its Angi Services busines. We expect its margins to remain weak and credit metrics pressured over the next 12 months, with the company generating negative to breakeven EBITDA in 2021. As a result, we lowered our issuer credit rating on the company to 'B+' from 'BB-'. We also lowered our stand-alone credit profile on the company to 'b' from 'b+'. We continue to apply a one-notch uplift to the SACP to reflect potential group support from its parent, IAC/InterActiveCorp. in a stress scenario to

...- Denver-based home services digital marketplace company Angi Inc. reported weaker EBITDA margins than we expected through the first half of 2021 given increased marketing expenditures from its rebranding efforts, and operating expenses tied to growth in its Angi Services busines. - We expect its margins to remain weak and credit metrics pressured over the next 12 months, with the company generating negative to breakeven EBITDA in 2021. - As a result, we lowered our issuer credit rating on the company to 'B+' from '##-'. We also lowered our stand-alone credit profile on the company to 'b' from 'b+'. We continue to apply a one-notch uplift to the SACP to reflect potential group support from its parent, IAC/InterActiveCorp. in a stress scenario to derive the issuer credit rating. - At the same time we lowered our issue-level rating on Angi Group's $500 million senior unsecured notes to 'B+' from '##-'. - The stable outlook reflects the company's sizable cash balance that will support operations,...

Research Update