Fiverr Pops 18% In Pre-Market On Upbeat 2Q Earnings And Raised Outlook

Shares of Fiverr International are advancing about 18% in pre-market trading after the freelance service platform topped 2Q earnings and revenue expectations. The company also raised its full-year outlook, reflecting rising demand for freelance work amid the pandemic.

Fiverr International (FVRR) reported adjusted earnings of $0.10 per share in 2Q as compared to a loss of $0.19 per share in the year-ago quarter. Analysts had expected a loss of $0.06 per share. Top-line growth and gross margin expansion cushioned its bottom line. Revenues of $47.1 billion also outpaced Wall Street expectations of $36.5 billion and grew 82% year-over-year. Active buyers increased by 28% to 2.8 million year-over-year.

For the third quarter, the company expects revenue growth of around 72%-76% and adjusted EBITDA of about $2-$3 million. Fiverr raised its 2020 revenue growth guidance to 66%-68%, up from the earlier forecast of 36%-38%.

Earlier, Oppenheimer analyst Jason Helfstein said “As the leading marketplace for freelance labor, we believe Fiverr is well positioned to capitalize on a shift in the labor market toward more independently-driven opportunities made possible through digitization. Estimated at a $100B market, only 3% of freelancing jobs are completed online and only 25% of those who identify as a freelancer have ever used an online platform.” He maintains a Buy rating on the stock with a price target of $74 (29% downside potential).

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 3 Buys and 4 Holds. The stock has surged over 343% year-to-date, so it is not surprising that the average price target of $60.14 implies a downside potential of about 42%. (See FVRR stock analysis on TipRanks).