Being a tech investor isn't easy these days, and no one can say when this volatile environment will end. Some analysts on Wall Street are predicting that it could be 2024 before investors really start to see an economic turnaround, which would of course portend well for higher-growth, tech-oriented businesses. Until then, investors may be in for more choppy waters ahead.
Even so, if you're buying stocks with a minimum investment horizon of three to five years or longer, the ebb and flow of the market in the coming months shouldn't put you off investing in companies that align with your risk tolerance and portfolio goals. If you're looking to add to your portfolio right now, here are two powerhouse stocks on sale that you may want to put on your list of buys.
1. Fiverr
Fiverr (FVRR -1.44%) is one of the leading platforms capitalizing on the gig economy -- a phenomenon that was well underway before the pandemic and is set to see explosive growth in the years ahead. According to a study conducted by McKinsey in 2022, approximately 36% of the U.S. workforce are members of the gig economy, a notable increase from the 27% reported in 2016.
The utility of Fiverr for both entrepreneurs selling services on the platform as well as the businesses and individuals paying for those services will only grow in the years ahead with broader expansion of the gig economy.
From copywriting to podcast production to animation to digital marketing services to market research to financial consulting, companies across virtually every industry imaginable can find a freelancer who aligns with their business needs on Fiverr's platform.
With more people joining the gig economy and companies looking to shave costs in a tough economic environment, this creates a golden opportunity for Fiverr. Whether you're a freelancer looking to replace or supplement a traditional full-time income, or a company searching for talent that doesn't require a full-time employment contract, Fiverr's platform capitalizes on the multipronged needs and preferences stemming from a growing digital economy, and can continue to draw users both in and outside of a recessionary landscape.
As of the third quarter of 2022, Fiverr counted 4.2 million active buyers on its platform, which means that it has more than doubled its active buyer count from pre-pandemic levels. In 2019, Fiverr recorded 2.4 million active buyers. Its revenue and take rate are both still growing steadily. The company's top line rose 11% year over year in the third quarter, and Fiverr hiked its take rate by 160 basis points from the year-ago period to 30%.
With an ever-expanding opportunity in a still-underpenetrated addressable market valued at upwards of $250 billion in the U.S. alone, Fiverr has plenty of room left to run. Long-term shareholders of this gig-economy stock can reap the rewards, provided they can handle the near-term choppy waters of the market.
2. Airbnb
Airbnb (ABNB 1.09%) has continued an incredible streak of financial wins over the past several quarters, even as many growth-oriented companies have reported weak or decelerating growth. The company has marked an incredible recovery from the travel lulls of the earlier pandemic period, but there's more that's driving the underlying strength of its business than a rebound in domestic and international travel.
Certainly, the positive changes in travel spending, with most borders reopened around the world, have correlated with the company's incredible financial results. The company reported its most profitable quarter on record in Q3 2022, generating $1.2 billion in net income for the three-month period, up 61% year over year on a currency-neutral basis. Its top-line growth was also stellar, with Airbnb reporting $3 billion in revenue for Q3, up 36% on a currency-neutral basis from one year ago.
And its top- and bottom-line figures represented respective surges of 70% and 260% on a three-year basis. Airbnb closed out Q3 with just shy of $8 billion in cash on its balance sheet and had generated $966 million in free cash flow just in that three-month window. Beyond the wider travel recovery, management is also attributing long-term changes in the habits of its broad user base as key catalysts that can lend resilience to its platform over the long term, even if a recession does hit.
In the Q3 earnings call, CEO Brian Chesky affirmed: "Well, new use cases such as long-term stays and non-urban travel are here to stay. And this is because millions of people now have the flexibility that they didn't have before the pandemic."
He added:
At the same time, we've seen recovery in urban and cross-border travel, two of our strongest segments before the pandemic. And just like during the Great Recession in 2008, when Airbnb started, people today are especially interested in earning extra income through hosting.
Since the way that people are traveling has changed from before the pandemic, roughly 20% of all bookings on Airbnb's platform are from long-term stays of 28 days or more. Airbnb's platform doesn't just benefit from these cohorts of users but also from those looking for ways to make extra money in a thriving gig economy by running their own Airbnb. Hosts raked in more than $21 billion on Airbnb in the first six months of 2022 alone.
Investors looking to capitalize on the durable potential of the travel industry (which over the long term will remain a key source of consumer spending); the changing labor economy; and the rising popularity of work-and-travel arrangements can tap into the best of all worlds with this fast-growing tech stock.
