Angi's (ANGI) transformation remains in its early stages, leaving investors quick to punish fundamental misses such as its Q2 results, RBC Capital Markets said.

The bull case scenario assumes Angi uses AI to more quickly develop a fuller toolkit that helps Service Pros win jobs and drives renewed organic growth in its core ads business.

Many key performance indicators are improving, with smaller quarter-over-quarter declines in revenue and Service Pros capacity, but the March traffic disruption and the ongoing whittling of lower-quality traffic remain a headwind, according to the note.

The brokerage lowered its revenue, service requests, leads, and adjusted EBITDA estimates to reflect the softer-than-expected Q2 results and weaker demand trends, though it incorporated the recent sequential improvement in July revenue trends, the note added.

RBC acknowledged promising indicators around pro retention, large-pro growth and early AI product traction that could support a recovery in the second half of 2026 and beyond.

RBC kept a sector perform rating on Angi with a price target of $5.

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