Shares of job marketplace Upwork (UPWK -3.04%) plunged on Monday morning, after an analyst lowered his price target for the stock. The market was down sharply as well, exacerbating the pressure on shares of Upwork. As of 1:30 p.m. ET today, the stock was down 10%.
According to The Fly, BTIG analyst Marvin Fong lowered his price target for Upwork today from $34 per share to $30, a decrease of almost 12%. As recently as October, Fong had a price target more than double the current one. However, the stock has fallen by more than 50% since then, and price targets tend to be reactionary to price movements -- when stocks fall, price targets come down.
While Fong frequently adjusts his price targets for Upwork stock, he is at least consistent with his rating. According to TipRanks, Fong has issued a statement 25 times since the middle of 2020. During this time, he has resolutely said Upwork stock was a buy.
Today's reaction is a reliable quirk in how the market interprets financial news. Fong recommends buying Upwork stock and believes it has about 36% upside from where it trades right now, which sounds bullish. But the market doesn't care about that. All it cares about is that Fong lowered the price target, which is why the stock is down today.
For its part, Upwork is scheduled to report financial results for the second quarter of 2022 on July 27. Management previously guided for second-quarter revenue of $147 million to $151 million, which would be an 18% to 22% year-over-year increase. My guess is that Upwork will need to at least hit this and maintain guidance for the year to keep from falling further.
However, if the stock does fall further, expect further reactionary price-target decreases from analysts.