Fiverr Stock Takes the Lead in the Freelance Sector

The freelance market is booming and so is Fiverr

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Fiverr International Ltd. (NYSE:FVRR) is an online market platform for freelancers to offer a huge variety of services worldwide. The company started trading publicly about a year ago, and has sky-rocketed since its initial public offering. The stock was pretty stagnant during its first nine months of trading, but was mega-boosted by the coronavirus pandemic, which triggered people everywhere to begin looking for ways to make money remotely. As a result of the tight full-time job market and the new work-from-home culture growth, investors began to see just how big the freelance market could become. Today the stock is up over 600% year-to-date. Even so, FVRR stock is unlikely to have capped out, and the stock's true growth may have just begun.

Fundamentally speaking, Fiverr has a market cap of $6.03 billion and a book value of $4.82 per share. Its price-to-book (P/B) ratio stands at 20.56. The company has an enormous trailing price-earnings (P/E) ratio of 830.50 and an even bigger forward P/E ratio of 10,000.

Fiverr has beat expectations on its last four earnings reports. Further, Fiverr has either increased or maintained their revenue for the past four quarters. In the most recent quarter, Fiverr beat analysts' target by $0.16. Fiverr reported adjusted quarterly earnings-per-share of (EPS) of $0.10,  compared to the expected $0.06 loss. This signaled the company’s biggest earnings beat in the last 12 months. Fiverr is expected to release it's quarterly financials on October 28, including an expected EPS of $0.08. The company has a trailing 12-month EPS of -$2.29.

Fiverr has grown its revenue by approximately $25 million since 2017, and is on track to continue this growth. The company has grown its revenue consistently over the last four quarters, too.  Fiverr has reduced its net income loss every year since 2018, but had its best year (as it relates to net income) in 2017. Last quarter. Fiverr released its best quarterly report of net income, reporting a net income of -$124,000. Over the past four quarters, Fiverr has seen a consistent decline in net income losses.

Fiverr currently has $201.84 million in cash and $2.76 million in total debt. The company’s balance sheet shows $404.61 million in total assets and $121.03 million in total liabilities. Fiverr's total equity stands at $283.58 million.

In just the past 12 months, FVRR stock has gone from a small market cap to a mid-sized market cap. FVRR stock is, without a doubt, incredibly overpriced based on the financial reports have have been released. However, there is a strong possibility that investors may miss out on a stock with even higher growth potential if they opt to wait for a lower entry price. In addition, Fiverr has an outstanding balance sheet for a company of its size. The company could pay its debt without even putting a dent in its cash balance.

What makes Fiverr special is the ease and accessibility it provides on its platform. The company makes negotiations easy for buyers and sellers with features like its rating system, service descriptions, profile overviews, messaging, and on-site money transactions. In return, Fiverr takes a 20% tax from all transactions.

Overall, Fiverr is well-positioned to take full advantage of the growing freelance market for years to come. Its biggest competitor will likely be Upwork Inc. (UPWK). Although UPWK stock presents a better value, Fiverr is more well-known and has a more recognizable brand. Bottom line, though, is that there should be plenty opportunity for both companies to thrive in the work-from-home/freelance economy as it grows.

 

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