FVRR - Fiverr: Rating Changed From Buy To Hold With Valuation Risks Rising
2024-05-20 02:50:26 ET
Summary
- Fiverr's Q1 earnings showed growth in revenue and earnings, with progress in upmarket expansion and complex services, leading to higher spend per buyer and increasing profitability.
- FVRR continues to innovate its Fiverr Business Solutions by improving seller visibility and accountability, while adding flexible payment options for high-value buyers.
- At the same time, the management is doubling down on agencies to scale its presence in complex services which have higher transaction values.
- Although fundamentals are improving, the recent surge in the stock prices has squeezed its valuation from a risk-reward perspective, making it a Hold.
Introduction & Investment Thesis
I initiated a "buy" rating on Fiverr International (FVRR) in early May before its Q1 earnings, where I believed that the worst had been priced in for the stock, as the management started seeing success with its progress upmarket and gaining market share in complex services, allowing it to expand its spend per buyer and overall profitability....
Fiverr: Rating Changed From Buy To Hold, With Valuation Risks Rising