Whole Industries are teetering on the edge of collapse. In several states unemployment rates remain at Great Depression levels. And the contraction of the economy means we are likely entering another global recession.
Bad news all around, then. Well, except if you happen to be Fiverr (FVRR).
Shares are up by 363% year-to-date and the online freelance marketplace has just delivered a spectacular second quarter earnings report.
Revenue increased year-over-year by 82% to $47.13 million, 29% above the Street’s forecast. Bottom line made mincemeat of the estimates, too, with adjusted EPS of $0.10 beating consensus by $0.17.
Active buyers grew by 28% year-over-year and 17% quarter-over-quarter to 2.8 million. Moreover, Fiverr achieved quarterly adjusted EBITDA profitability for the first time in its history.
The performance is impressive, and one perfectly suited to these times. The gig economy was already picking up steam prior to the viral outbreak, and COVID-19 has proved a strong tailwind – one which could last a while.
The global freelance market is estimated to be worth $100 billion but only 3% of freelancing jobs happen online. Additionally, only 25% of those who consider themselves freelancers have ever attempted to source work through an online platform, so there is significant room for growth.
Oppenheimer analyst Jason Helfstein believes the results indicate there are “significant tailwinds accelerating secular adoption by several years.”
The 5-star analyst said, “2Q results highlight the significant pull-forward in adoption of freelancing on both the supply and demand sides of the marketplace… Added 30 categories, now >400, with eCommerce, content creation and digital marketing benefiting. Seeing significant influx in sellers from pandemic. Expanded Promoted Gigs to ten additional categories (15 total) and offering to more sellers, with CPMs increasing with competition.”
Accordingly, Helfstein reiterated an Outperform (i.e. Buy) on FVRR shares and upped the price target by a significant margin – from $74 to $140. This figure implies nearly 30% from current levels. (To watch Helfstein’s track record, click here)
The rest of the Street’s take is more measured. Fiverr has a Moderate Buy consensus rating based on 3 Buys and 3 Holds. However, the analysts think the online marketplace has surged enough for now; going by the $114.17 average price target, shares are expected to rise by a modest 4% from current levels. (See Fiverr stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
