FVRR - Fiverr: Why The Core Story Still Holds Despite Recent Headwinds; Buy
2024-06-28 05:53:21 ET
Summary
- Fiverr's performance has been worse than expected, with disappointing revenue and GMV growth.
- However, despite short-term challenges, Fiverr's long-term narrative remains intact with potential for strong growth in the online freelancing industry.
- Actual AI impact has been a proof of its business model being technology-agnostic.
Almost two years have passed since my last evaluation of Fiverr International Inc. (FVRR). In that initial analysis done in Aug 2022, I considered Fiverr a great idea for long-term investors who wanted to participate in the digitalization of the freelancing industry, an industry with a secular trend and attractive long-term growth perspectives. Since then, however, the shares have depreciated by c. 25% (c. 40% since the article was published) even though I found them undervalued with an intrinsic value of c. $60 per share. In between, there were tech layoffs, a more severe-than-anticipated post-COVID impact, higher-than-expected rates, and the rise of AI.
However, there are signs that expectations may have bottomed out. Now, the economy seems stronger than anticipated, the number of layoff rounds has decreased, and Fiverr is focusing on boosting spend-per-buyer by going through complex services and an up-market focus. Based on that, this article will share my updated vision of the company, looking at the industry, Fiverr’s latest results, and its outlook....
Fiverr: Why The Core Story Still Holds Despite Recent Headwinds; Buy