Needham analyst Bernie McTernan reiterated Fiverr International Ltd FVRR with a Buy and a $40 price target. The re-rating followed better-than-expected 2Q earnings, which featured a beat and raise on revenue and adjusted EBITDA.
It appears 1Q23 will represent the trough point of revenue growth in this cycle for FVRR, in the current stable macroeconomic environment, FVRR is focusing on going up the market, which will drive a mix shift of GSV growth from active buyers to ARPU.
Despite the solid results and guide, McTernan took a more conservative approach to his FY24E estimates with +15% revenue growth and margins down 50bps assuming more significant sales and marketing investment.
He is intrigued with the launch of Neo as a way to leverage generative AI and FVRR's data to provide better matching for buyers in the marketplace, which should drive customer LTVs higher if successful.
He expects revenue of $361.6 million (prior $359.8 million) in FY23E and $415.8 million (earlier $440.8 million) in FY24E.
JMP Securities analyst Andrew Boone maintained a Buy rating on Fiverr with a price target of $50.
Fiverr reported solid 2Q23 results as EBITDA came in $1.3 million above the high end of guidance, and the company raised 2023 revenue, and EBITDA guidance as macro and cohorts were stable in 2Q23.
Comparing his thoughts to last quarter, AI now appears to be a tailwind for Fiverr (rather than a disruptor of demand) as the company introduced Fiverr Neo. This AI-powered chatbot-based search tool can better connect buyers to gigs and represents a significant catalyst to conversion and revenue growth next year.
While he acknowledged the ongoing soft macro environment, he expects freelancers to be a more significant portion of the labor force in the future.
With Fiverr now structurally more profitable and a clear path to 25%+ long-term EBITDA margins, he believes that current shares are an opportunity as macro has yet to rebound. At the same time, product catalysts exist in Neo and Fiverr Business Solutions (its mid-market offering).
He expects revenue of $361.6 million (prior $360 million) in FY23E and $418.7 million (earlier $415.8 million) in FY24E.
Roth MKM analyst Rohit Kulkarni reiterated a Neutral and raised the price target from $30 to $33.
The analyst re-rated as fundamentals and key metrics remain soft. And, on comparable valuation and fundamentals, he would be an incremental buyer of Upwork Inc UPWK shares with more growth drivers ahead and a more significant margin upside potential over the longer term.
He expects revenue of $363.3 million (prior $362.7 million) in FY23E and $421.5 million (earlier $420.8 million) in FY24E.
Price Action: FVRR shares are trading lower by 3.81% at $32.32 on the last check Friday.
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