UPWK - Upwork: Made Significant Progress In Delivering Profitable Growth

2024-05-05 11:38:37 ET

Summary

• Upwork's stock increased by 8% following the 1Q24 results, driven by raised adjusted EBITDA forecasts for FY24 and revenue and profitability exceeding expectations.
• A new pricing structure, significant growth in ad and monetization offerings, steady recovery in active client base growth and increased operating efficiency contributed to its 1Q24 outperformance.
• This quarter marks Upwork's 3rd consecutive quarter of profitability.
• Trading at a reasonable EV/sales ratio of 2.2x when compared to other similar marketplace businesses and peers.
• Revised rating from "hold" to "buy" based on demonstrated growth and profitability.

Investment Thesis

I covered Upwork (UPWK) back in March 2024 , and since then, the stock has climbed by 8%. Before I dive into its earnings, let me quickly lay out my main investment thesis, and that is whether Upwork has shown clear signs of re-accelerating its growth while maintaining (or improving) profitability....

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