Please ensure Javascript is enabled for purposes of website accessibility

Is This a Buying Opportunity for Fiverr?

By Jose Najarro – Aug 13, 2021 at 8:00AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A decrease in guidance has created some bearish sentiment toward Fiverr's stock price.

Fiverr's (FVRR -4.24%) stock price dropped over 20% after the company reported its second-quarter 2021 earnings on Aug. 5, 2021. In today's video I look at Fiverr's and Upwork's (UPWK 2.06%) most recent earnings and news. Here are some highlights from the video. 

  1. Fiverr announced 60% year-over-year (YoY) revenue growth when it reported its second-quarter 2021 earnings on Aug. 5. The revenue growth was driven by the increase in active buyers and the average spend per buyer. Unfortunately, due to COVID-19 restrictions being lifted and people spending more time out of the home, Fiverr had to reduce its full-year guidance. Fiverr had previously guided for YoY revenue growth of roughly 61% and now expects only 50% growth for the full year 2021.
  2. Upwork announced 42% YoY revenue growth when it reported its second-quarter 2021 earnings on July 29. Unlike Fiverr, which downgraded its full-year guidance, Upwork did the opposite and increased its 2021 guidance. The updated guidance is also in line with Wall Street expectations, which might be a bullish case for Upwork.  
  3. Even though Fiverr and Upwork have similar business styles, they are growing at different levels and are valued accordingly. Fiverr's and Upwork's forward price-to-sales ratios are roughly 16.3 and 9.1, respectively. Still, investors need to note that Fiverr is growing at faster levels and has higher gross margins than Upwork, which could be a reason for the higher valuation. 

Click the video below for my full thoughts and analysis. 

*Stock prices used were the midday prices of Aug. 11, 2021. The video was published on Aug. 11, 2021.


  

Jose Najarro owns shares of Fiverr International and Upwork. The Motley Fool owns shares of and recommends Fiverr International. The Motley Fool recommends Upwork. The Motley Fool has a disclosure policy. Jose 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.

Stocks Mentioned

Fiverr International Stock Quote
Fiverr International
FVRR
$33.86 (-4.24%) $-1.50
Upwork Stock Quote
Upwork
UPWK
$12.38 (2.06%) $0.25

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.