Shares of Fiverr International (NYSE:FVRR) tumbled today after an analyst at UBS downgraded the company's stock from neutral to sell.
Investors clearly weren't happy with today's news and pushed the tech stock down by as much as 14%. Fiverr's share price had fallen 10.4% as of 12:58 p.m. EST.
UBS analyst Eric Sheridan said in an investor note that Fiverr is "emblematic of a market that values growth over any semblance of valuation that can be justified." And while he downgraded the stock, he increased its price target to $190, up from the previous $148.
Sheridan strongly urged investors that they "need to be wary of the rising trend of bull market optimism." That word of caution should be applied to companies that have benefited from COVID-19 and those that have gone public within the past 18 months, according to the analyst.
Investors appeared to agree, at least in part, with Sheridan's assessment of Fiverr, and the company's stock fell today after a prolonged rally over the past year.
Fiverr's stock price soared in 2020 as more people looked for work on the company's freelancing platform during the pandemic. Even after today's share price drop, the company's stock has still gained a mind-blowing 785% over the past 12 months. With the pandemic currently raging on, and a slower-than-expected vaccine rollout in many countries, Fiverr's platform could continue to see growth in 2021.