Fiverr International (NYSE:FVRR) is off to a strong start to 2024, outperforming revenue and earnings forecasts. This success can be attributed to the company’s vigorous growth in its Service Provider Business (SPB), strategic emphasis on complex service offerings, and calculated investment in AI.
The stock has risen over 8% in the past three months, and there are promising potential catalysts to drive it even higher, including the recently announced $100 million share buyback plan and hitting the raised numbers offered in its revised full-year guidance.
With its innovative approach and focus on user engagement, Fiverr is well-positioned to gain market share further, putting investors interested in a tech-centric play in the gig economy on alert.
Fiverr Expands into Business Solutions
Fiverr is an online platform that has revolutionized the e-commerce landscape by providing a marketplace for digital services. The platform enables freelancers to connect with potential employers, transforming gig work dynamics and business operations.
The company is also making advancements with its Business Solutions by employing AI technology to align its business customers with suitable talent, target the skills shortage, and develop sustained interactions on its platform. The company is committed to enhancing sellers’ visibility and introducing accountability using AI-driven ratings and verification systems.
Fiverr is putting more emphasis on working with agencies. This strategy focuses on nurturing long-lasting customer relationships as Fiverr moves upmarket, enabling businesses to locate and hire full-service agencies for large-scale and complex projects.
Fiverr’s Recent Financial Results & Outlook
The company reported first-quarter 2024 financial results that surpassed expectations. Revenue of $93.52 million beat consensus estimates of $92.42 million, marking a year-on-year increase of 6.3% over revenue for the first quarter of 2023 of $88.0 million. Despite active buyers dropping by 6% from 4.3 million in Q1 2023 to 4.0 million in Q1 2024, the average spend per buyer increased by 8%, hitting $284 from $262 within the same period.
Notably, the non-GAAP gross margin increased by 100 basis points to 84.9% from 83.9%. Reported non-GAAP earnings per share of $0.52 exceeded analysts’ prediction of $0.45, marking an impressive earnings beat.
Management has issued guidance for Q2 and the full year 2024. Forecasts for Q2 revenue range from $93.5 million to $95.5 million, with a consensus of $94.45 million and adjusted EBITDA between $16 million and $18 million. The revenue prediction for FY24 is between $381 million and $387 million, with a consensus estimate of $382.8 million, and adjusted EBITDA stands at $67 million and $73 million.
What Is the Price Target for FVRR Stock?
Analysts following the company have been bullish on the stock. For example, Citi’s Analyst Ronald Josey, a five-star analyst according to Tipranks’ ratings, recently reiterated a Buy rating on the stock and set a price target of $35.00. He stated that the company’s shift towards higher-end markets, in addition to its growing use of AI technology, is likely to boost the number of repeat customers.
Overall, Fiverr International is rated a Strong Buy based on the ratings and price targets assigned by six analysts over the past three months. The average price target for FVRR stock is $33.50, representing a potential upside of 35.46% from current levels.
The stock is highly volatile, though it has been on an upward trend recently, climbing roughly 4.75% in the past month. Shares trade at the lower half of the 52-week price range of $18.83 – $34.49 and show positive price momentum, trading above the 20-day (24.45) and 50-day (23.58) moving averages.
Final Thoughts on Fiverr
Fiverr’s innovative approach to the gig economy, user engagement strategies, the $100 million share buyback plan, and the prospect of meeting its revised full-year guidance all signal good tidings for the future. The stock holds potential upside for investors seeking a technology-centered play in the gig economy.
