Fiverr International Ltd . (NYSE:), an online marketplace offering freelance services that is based in Israel, can be found at www.NYSE. The marketplace allows freelancers in more than 160 countries to offer a range of digital services.
The company was greatly impacted by the growth of the gig economy. It is estimated that it will reach $455.2 million in 2023. A gig economy allows businesses to engage in short-term contracts with independent freelancers.
Fiverr appears well placed to take advantage of the industry’s expected growth, and continues to improve the platform experience for clients as well as freelancers.
Even though there is a potential hit to Fiverr from the economic reopening I remain optimistic about the company’s long-term prospects. (See FVRR stock charts on TipRanks)
Fiverr Will Grow with the Industry
With an increasing number of small businesses searching for part-time independent workers, the gig economy is booming, providing employers with both affordability and access to a high-quality pool of talent.
A gig economy’s growth is due to the flexibility to work remotely and a healthier work-life balance. Over 30% of developing countries have used freelancer platforms during the past 12 months.
India, Brazil, China and Brazil have the largest number of gig workers. The idea is rapidly gaining popularity. Leading freelancing platforms help gig workers worldwide to start their businesses.
Fiverr emerged as a top-rated platform, because it provides both buyers and sellers an easy and flexible way to do business. Fiverr is a leader in freelancing market share and growth in comparison to its competition over the past 2 years.
Fiverr saw revenues rise 60% from the first quarter to $75.3million. The increase in active buyers of 43% and 23% respectively, boosted by a 40% increase in buyer spend.
The company has formed strategic partnerships with technology companies like Wix.com and Salesforce.com to attract new sellers and businesses. Ltd. Fiverr should report stellar earnings growth during the post-pandemic period due to these partnerships and a positive macroeconomic outlook.
Challenges to Be Temporary Obstacles for Growth
Fiverr can be expected to face some headwinds as the economy recovers and normalcy prevails, prompting employers to request their employees to return to the office.
Recently, company management highlighted the fact that pandemic restrictions will soon be relaxed around the globe, and travel recoveries, which will impact the business in the next quarters.
Fiverr has adjusted its Fiscal 2021 guidance accordingly. The company expects to generate revenue in the region of $280million to $288million, which is a 48% to 52% increase year over year.
While online travel is predicted to fall due to pent up demand for vacations as well as increased tourism, Fiverr has many revenue-generating possibilities.
Wall Street’s Take
Based on four Wall Street analysts offering 12-month price targets for Fiverr, the average price target comes to $220.50, which implies upside of 9.7% from the current market price.
Fiverr’s financial performance in the remainder of 2021 will give some color on what to expect from the company in the next five years, especially after the massive boost it received due to mobility restrictions and the virus-induced recession last year. It is worth keeping an eye on the changes to Wall Street analyst’s price targets over the next few months.
Fiverr’s continuous investment in its platform to enable more buyers and sellers to participate in the digital economy indicates that its sales and profitability will remain strong over the next five years.
Fiverr may be able to gain market share by taking on its competition.
Dilantha De Silva didn’t hold any position in the securities discussed in this article at the time it was published.
Disclaimer: This article is solely the author’s opinion and does not reflect the opinions of TipRanks and its affiliates. It should only be used for informational purposes. TipRanks cannot guarantee the reliability, completeness or accuracy of any information. The article does not constitute a solicitation or recommendation to buy or sell securities. The article does not provide legal, financial, investment, or professional advice. It also doesn’t take into consideration the individual needs or requirements. Neither is the information contained in it a complete or comprehensive statement about the subject or issues discussed. TipRanks, its affiliates, disclaim any liability or responsibility in relation to the article’s content. You are responsible for your actions based upon the articles. TipRanks and its affiliates do not endorse or recommend this link. The past performance of TipRanks or its affiliates is not an indication of future prices, results, or performances.