What happened
Fiverr International (FVRR 4.90%) stock is sinking again today. The gig-economy specialist's share price was down roughly 10.3% in the daily session as of 2:15 p.m. ET Wednesday. Meanwhile, the Nasdaq Composite index was down roughly 0.9%.
High-profile tech companies including Shopify (SHOP 5.58%), Nvidia, and Roblox have recently reported earnings and seen significant sell-offs, and the trend appears to be impacting Fiverr. The gig-labor company is set to publish fourth-quarter earnings results before the market opens on Thursday, and it looks like investors are selling out of the stock after surveying moves for other growth names on the heels of earnings.
Image source: Getty Images.
So what
Many growth-dependent tech stocks are seeing significant sell-offs in Wednesday's trading, but Shopify's Q4 report, guidance, and post-earnings pullback are likely the biggest catalysts in the sell-off for Fiverr stock. Shopify published its Q4 results before the market opened on Wednesday, and its stock is getting hammered despite the company posting sales and earnings for the quarter that topped the market's expectations.
The e-commerce specialist told investors that sales growth would slow significantly in the first half of this year as pandemic-related tailwinds recede. Fiverr's business has also benefited from surging demand during the pandemic, and investors appear to be interpreting Shopify's guidance as an indication that the gig-labor marketplace will also see its growth slow significantly.
Now what
Fiverr International has seen dramatic sell-offs over the last year as sales growth has slowed and investors have moved out of stocks with highly forward-looking valuations. The stock trades down roughly 75.5% from the high that it hit last February. The company now has a market capitalization of roughly $2.8 billion and is valued at approximately 7.5 times this year's expected sales.
With its last update, Fiverr guided for Q4 sales to come in between $74.5 million and $77.5 million, representing growth of roughly 36% year over year at the midpoint of the target. The company also targeted non-GAAP (adjusted) earnings before interest, taxes, depreciation, and amortization (EBITDA) between $5.5 million and $7 million for the period. Investors will get a look at how the company's Q4 performance stacks up against that guidance tomorrow.
