FVRR - Fiverr: Sharp Deceleration Makes Me Wary (Rating Downgrade)

2024-06-12 05:58:55 ET

Summary

• Fiverr stock has lagged the market this year with a 5% decline, despite a recent rally fueled by a $100 million buyback plan and Q1 earnings beat.
• Fiverr's Q1 results showed revenue growth deceleration and a shrinking buyer base, which may get worse with increased proliferation of AI.
• The only positive to Fiverr is a cheap valuation at ~9x current-year adjusted EBITDA, but this discount factors in a plethora of fundamental risks.

The stock market continues to dance around all-time highs, and now more than ever is a time for careful stock picking and caution with fundamentally choppy names. Fiverr ( FVRR ) is one stock to be careful on: the freelance work marketplace has struggled with a massive slowdown in its growth rates, even as profitability has improved....

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