What happened

Shares of Upwork (NASDAQ:UPWK) are up 9.6% in afternoon trading as of 2:15 p.m. EDT, after the freelancing facilitator received a pair of bullish endorsements on Wall Street.

This morning, Jefferies & Co. announced it is raising Upwork's price target 20% from $15 to $18 a share, reports StreetInsider.com. The stock had already passed $15 in Friday trading, so Jefferies may have felt compelled to raise its target to support its existing buy rating on the stock -- even at the risk of potentially getting caught wrong-footed when Upwork reports earnings tomorrow.

An arrow rising over the numbers 2020

Image source: Getty Images.

So what

Taking a more cautious stance is RBC Capital. Consensus estimates call for Upwork to report a $0.09-per-share loss in tomorrow's Q2 report, on sales of $80.3 million.  

In a note released over the weekend, RBC suggested that these numbers are reasonable and that the company might do even better in Q3, cutting its loss to perhaps $0.07 per share or less, and with sales growing past $85 million, buoyed by "elevated job postings and record high client engagements."

Now what

Longer term, RBC thinks Upwork has a bright future based on its "strong gross margins (71%), and robust, sustainable Revenue growth of 20%+." Despite this, with the stock up 40% year to date, RBC worries that the stock's valuation may be looking a bit stretched in the short term.

Despite rating Upwork shares a buy, RBC still values the stock at no more than $14 -- 15% below where the shares trade today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.