Shares of Upwork (NASDAQ:UPWK) gained 77.3% in November 2020, according to data from S&P Global Market Intelligence. The operator of a marketplace for freelance services absolutely crushed Wall Street's expectations with its third-quarter report.
Upwork's third-quarter sales grew 24% year over year to $96.7 million. Adjusted earnings jumped from $0.01 per share to $0.04 per share. The average analyst was forecasting a net loss of roughly $0.06 per share on revenue near $90.4 million. Looking ahead, management's sales guidance for the fourth quarter landed at $96.8 million. On that front, the Street has been predicting revenues in the neighborhood of $93 million.
The report was followed by a flurry of analyst upgrades and price-target increases, and Upwork shares closed 43.6% higher the next day. The stock price continued to rise in the following weeks as investors and analysts digested the company's results.
Upwork has been a major beneficiary of the growing transition to a gig economy, in which more and more skilled people provide their services to consumers or on behalf of larger companies in the guise of freelancers and contractors, rather than as traditional employees. The coronavirus pandemic accelerated this trend, but it has been expanding quietly for years.
All told, Upwork investors have seen the value of their stakes triple this year. The stock has become mighty expensive by traditional profit metrics, but growth investors prefer to measure companies like these on their ability to grow sales in a hurry. From that point of view, Upwork is doing everything right.