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An Analyst's Positives And Negatives On Fiverr

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An Analyst's Positives And Negatives On Fiverr

Fiverr international Ltd. (NYSE: FVRR), an online marketplace for freelance services company, began trading for the first time on a public market Thursday. MKM analysts offered their take from the sidelines.

The Thesis

Israel-based Fiverr's mission is to facilitate the buying and selling of digital services similar to physical goods on an e-commerce platform, MKM Partners' Rohit Kulkarni wrote in a note. The company is not profitable but its top line is growing almost twice as fast as comparable freelance platform Upwork Inc (NASDAQ: UPWK). Fiverr also boasts a higher take rate and gross margins compared to Upwork.

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MKM didn't participated in the share offering but following Fiverr's roadshow presentation points to four positive attributes. These include:

  • A large addressable market as up to 162 million people in the U.S. and Europe assumed some form of independent work in 2016.
  • Millennials and Gen Z workers are likely to pursue multiple "gig" jobs at a time.
  • Fiverr has an international presence with 2.1 million active buyers and 255,000 active sellers across 160 countries.
  • Repeat buyer activity and an expanding network should lead to additional transactions.

On the other hand, three investment risks investors may want to consider include:

  • Competition from Upwork and others.
  • Macro risk from freelance companies classifying workers as contractors.
  • Fiverr will likely continue burning cash through 2021.

Price Action

Fiverr's stock closed its first day of trading at $39.90 per share. The IPO was priced at $21 per share.

Related Links:

Fiverr Opens For Trade Well Above IPO Price

Fiverr IPO: What You Need To Know

Photo courtesy of Fiverr.

Latest Ratings for FVRR

DateFirmActionFromTo
Jul 2019Initiates Coverage OnOutperform
Jul 2019Initiates Coverage OnMarket Outperform
Jul 2019Initiates Coverage OnBuy

View More Analyst Ratings for FVRR
View the Latest Analyst Ratings

Posted-In: freelance Gig Economy MKM Partners Rohit KulkarniAnalyst Color IPOs Analyst Ratings Best of Benzinga

 

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