FVRR - Fiverr: Getting Cheaper But Not Cheap Enough To Justify Risks

2024-03-31 04:07:09 ET

Summary

• Fiverr's stock has dropped 20% this year due to slower growth rates and increasing risks from AI.
• The company's active buyer base is shrinking, and AI tools are reducing the need for "simple services" on the platform.
• Fiverr faces competition from other freelance marketplaces and may struggle to compete in the long run.
• The only draw to this company is value, as it trades at a <8x forward adjusted EBITDA multiple. This isn't enough to compensate for long-term existential risks, however.

So far in 2024, the market has proven to be a "winner take all" game. Though the S&P 500 is sitting at all time highs, that growth has been driven by AI stocks - while many less prominent companies have conversely seen dramatic declines in share price....

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