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Here's Why I Bought Fiverr After It Crashed 24%

By Neil Rozenbaum – Aug 6, 2021 at 10:30AM

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Lowered guidance seemed to drag the work-from-home stock down, but the long-term thesis hasn't changed.

In this video I will be covering Fiverr's (FVRR -2.56%) Q2 earnings report, which was outstanding, and discussing the main reason the stock crashed 24%. I believe Fiverr is a long-term hold and have covered it previously. Those willing to go through short-term pain will enjoy long-term gains. You can find the full video below. 

Earnings highlights

Despite the stock's being down close to 25%, the company reported outstanding earnings. Revenue for the quarter was $75.3 million, up 60% year over year, active buyers reached 4 million, and spend per buyer is up 23% YOY to $226. The most impressive metrics to me are take rate and gross margins, which stand at 27.8% and 84.4% (non-GAAP) respectively. Fiverr Business, which caters to larger businesses, a bit like Upwork, already represents 5% of Fiverr's marketplace revenue. 

So what

The main reason the stock is down heavily is that the company lowered guidance for the year after raising it in the previous quarter. As the company noted during the call, "The seasonality in the second half of this year was expected when we provided guidance in May; however, we didn't have the visibility to the unprecedented nature of post-pandemic hyper-seasonality." 

After being stuck at home for more than a year, it goes without saying that people want to go outside and travel more than ever before. That in turn has affected Fiverr and will affect it in the second half of the year as well. But it has seen positive growth signs in Australia because of the winter season. This could mean that Fiverr might experience a similar winter effect for Q4 and beat guidance. Time will tell. 

For the full insights do watch the video below. 

*Stock prices used were the closing prices of August 5, 2021. The video was published on August 6, 2021.

Neil Rozenbaum owns shares of Fiverr International. The Motley Fool owns shares of and recommends Fiverr International. The Motley Fool recommends Upwork. The Motley Fool has a disclosure policyNeil is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

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Stocks Mentioned

Fiverr International Stock Quote
Fiverr International
$34.19 (-2.56%) $0.90
Upwork Stock Quote
$11.49 (-2.54%) $0.30

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