What happened

Shares of Fiverr International (FVRR 1.34%) fell by 17.1% in December, according to data from S&P Global Market Intelligence. This was a story of temporary gains being reversed by even larger price cuts. The freelance services reseller experienced that unfortunate pattern twice last month.

So what

Fiverr entered December on a high note after gaining 13.6% in November. An impressive third-quarter earnings report briefly sent Fiverr's shares up by more than 20% in mid-November. Still, those gains faded over the next few weeks under the relentless pressure of high inflation and rising interest rates. Once again, Wall Street backed away from unprofitable growth stocks with lofty valuation ratios -- a description that used to fit Fiverr like a glove. The downward momentum carried over into early December, and the earnings-based gains of the previous month had been erased by Dec. 6.

The next rise-and-fall U-turn followed a week later. First, Fiverr's shares gained 5.7% in two days, goosed by an analyst's bullish report. Ronald Josey of Citi initiated coverage of the stock with a buy rating and a $45 price target, more than 40% above Fiverr's closing price on the day before his report. Josey described Fiverr as "innovative," and argued that the company should see wider margins and better profits over the coming year.

But the upbeat mood around the stock didn't last long. Two days later, the Federal Reserve raised the benchmark federal funds rate by another 0.5 percentage points, triggering another marketwide retreat from growth stocks. In the wake of that, Fiverr shares fell by 9% in two days.

Now what

Market makers see lots of valuation risk in Fiverr's stock, which makes sense when you focus on the company's skimpy adjusted earnings and negative bottom-line results under generally accepted accounting policies (GAAP). But then you're ignoring Fiverr's ability to deliver double-digit sales growth percentages during turbulent economic times and much snappier revenue growth when times are good.

The dark cloud hanging over Fiverr's proverbial head is the idea that its skyrocketing sales in 2020 -- and its concomitant stock gains -- were a unique side effect of the coronavirus crisis, punctured by the arrival of COVID-19 vaccines, and never to be repeated. That's the core argument Fiverr's bears run to whenever the market gives them a reason to chide the stock. I think that's a mistake because the gig economy appears to have staying power. As a leader in that game-changing shift in career and employment patterns, Fiverr should have many years of market-beating growth left. As such, I think the stock is a screaming buy at these rock-bottom prices.