What happened
Fiverr International (FVRR -3.98%) shareholders outperformed a rising market last month. Their stock jumped 18% in June compared to a 2.2% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.
The surge put the platform, which connects freelancers with employers, back in positive territory for the year, mainly thanks to improving prospects for its wider market niche.
Image source: Getty Images.
So what
The stage for June's rally was set in the previous month when Fiverr fell along with many of its peers in the tech space. Despite having just posted over 100% revenue growth, the stock fell as investors became more cautious about work-from-home businesses.
That caution turned to enthusiasm in June, though, and Fiverr rebounded sharply as the Nasdaq soared 5%.
Now what
Investors have no shortage of reasons to like Fiverr's business today. Its recent surging growth confirms that it is well placed to gain market share in a tight labor industry. CEO Micha Kaufman and his team are predicting sales will grow over 50% in the current quarter and by roughly 60% for the full 2021 fiscal year.
On the downside, Fiverr isn't generating sustainable profits so far, and that weakness makes the stock susceptible to declines during market downturns. But as long as the company keeps showing strong growth momentum, investors should see solid returns from holding shares through the volatility.
