FVRR - Fiverr International stock rallies after attracting buy rating from Citi

Citi launched coverage on Fiverr International ( NYSE: FVRR ) on Tuesday with a Buy rating and price target of $45.

The firm thinks that Fiverr ( FVRR ) through its Service-as-a-Product model and upfront and fixed-price project approach reduces the friction in matching demand with supply.

Analyst Ronald Josey pointed to an opportunity for FVRR to become among the largest freelancer marketplace for businesses large and small across the ~70 million independent workers in the U.S. that collectively earned ~$247B in 2021.

"Key to our thesis on Fiverr is that the marketplace should see growing demand given current macro-uncertainty. In recent months Fiverr has experienced a record number of sellers coming to its marketplace and as its seller base grows, we look for overall quality of its freelancer base to continue to improve as Fiverr’s service catalog expands."

Crucially, Citi believes the Israel-based company can demonstrate counter-cyclical benefits from continued macro-economic dislocation. The firm's price target on FVRR is based on 4X the 2023 EV/gross profit estimate and is noted to be in line with the median 2023 EV/gross profit multiples of Fiverr’s comparable companies.

Shares of FVRR were up 4.14% on Tuesday at 11:05 a.m.

The Seeking Alpha Quant Rating on Fiverr is at Hold after being at Sell for the first eight months of the year.

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