Fiverr Shares Tank 21% Early-Hours Despite Strong Q2 Results

Fiverr International Ltd. (FVRR), an online marketplace for freelance services, has delivered better-than-expected Q3 results as both earnings and revenues surpassed consensus estimates.

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Shares of the company, however, dropped a whopping 21% in early trading hours on Thursday after its guidance for Q3 and full-year 2021 revenues fell short of analysts’ expectations.

Q2 revenues jumped 60% from the year-ago period to $75.3 million, surpassing the Street’s estimates of $74.8 million. Active buyers during the quarter increased 43% year-over-year to 4 million from 2.8 million.

Meanwhile, adjusted earnings came in at $0.19 per share, beating the consensus estimates of $0.14. The figure compares favorably with $0.10 per share reported in the same quarter last year.

The adjusted EBITDA margin was up 310 basis points to 9.8%. It stood at 6.7% a year ago. (See Fiverr stock charts on TipRanks)

The Founder and CEO of Fiverr, Micha Kaufman, said, “We are accelerating the pace of investments to make Fiverr into a powerhouse that enables more buyers and sellers to participate in the digital service economy.”

For Q3, the company expects revenues in the range of $68 million to $72 million. Adjusted EBITDA is projected to be between $2.5 million and $3.5 million. As for FY2021, revenues are expected to be in the range of $280 million to $288 million. Also, the company expects to post adjusted EBITDA of $12 million to $14 million.

Two months ago, RBC Capital analyst Brad Erickson initiated coverage on the stock with a Buy rating and a price target of $235 (1.9% upside potential). The analyst is optimistic about the company’s “attractive frequency and fragmentation characteristics” to the “enormous” freelancing opportunity.

The stock has a Strong Buy consensus based on 5 unanimous Buys. The average Fiverr price target stands at $251.20 and implies upside potential of 8.9% from current levels.

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Fiverr, with 2.5% of investors registered on TipRanks increasing their exposure to FVRR stock over the past 30 days.