Why Angel Studios Stock Flew Higher Today
Key Points
Angel Studios did better than Wall Street expected in Q1.
Angel still might not be profitable for years to come, however.
- 10 stocks we like better than Angel Studios ›
Angel Studios (NYSE: ANGX) stock soared 15.4% through 11:40 a.m. ET Friday after reporting better than expected Q1 earnings last night. More precisely, Angel reported a smaller-than-expected loss; Wall Street had predicted Angel would lose $0.11 per share in Q1.
Angel actually lost only $0.08 per share, however, and Angel's sales took flight, soaring 143% year over year.
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Angel Q1 earnings
Angel's an unusual stock. It began life as "VidAngel," specializing in editing Hollywood blockbusters to remove offensive language and violence before publishing. Angel later went public itself in a SPAC IPO last year.
Angel depends on "paying guild members" supporting its work to provide about 72% of its revenue, and grew its guild membership 11% sequentially to 2.22 million in Q1. Year over year, guild membership is up more than double. Total revenue likewise more than doubled to $115.1 million.
What's next for Angel Studios?
This wasn't enough to turn the company GAAP-profitable in the quarter -- actual GAAP losses were $0.08 per share -- but Angel did achieve what it calls positive Adjusted EBITDA, referring to earnings before interest, taxes, depreciation, and amortization (EBITDA). That's not nearly as good as GAAP profits, but so long as EBITDA keeps climbing, investors can safely assume Angel is on the right path to turn profitable eventually.
Long story short, Angel did well in Q1, and there's reason for optimism among its supporters. Investors still need to be cautious, however, because Angel's guidance for this year sees even adjusted EBITDA reversing to turn negative again later in the year. The forecast right now is for a $25 million adjusted EBITDA loss for 2026.
And as for honest-to-goodness GAAP profitability, no one on Wall Street sees that happening for years to come.
Should you buy stock in Angel Studios right now?
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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