Should Traders Buy Fiverr Stock's Latest Dip?

The security carries a 45% year-over-year deficit

facebook twitter linkedin

The shares of Fiverr International Ltd. (NYSE:FVRR) are down 2.3% at $115.11 at last check. Though a reason for today's drop was not immediately clear, it could be related to some broader-market headwinds. The equity has been trending lower over the last few months, though, culminating in a Dec. 17, annual low $108.19. Plus, the descending 20-day moving average gas been guiding the shares lower since November, contributing to FVRR's 45% year-over-year deficit.

FVRR 20 Day 1220

Short sellers have been piling on Fiverr International stock lately. Short interest jumped 10.2% in the most recent reporting period, and the 3.04 million shares sold short make up 9.7% of FVRR's available float, or nearly four days' worth of pent-up buying power.

The options pits also lean bearish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security sports a 50-day put/call volume ratio of 1.41 that stands higher than 98% of annual readings. This suggests long calls have been getting picked up at a much quicker-than-usual pace.  

Fiverr stock’s valuation continues to be rich from a fundamental point of view, despite its massive fall over the past year. However, the freelance marketplace name is still posting impressive top-line figures, reporting 425% revenue growth since 2017. FVRR's trailing 12-month revenues have also grown 44% since fiscal 2020.

Nonetheless, Fiverr stock is trading at a very high price-sales ratio of 16.24. Overall, FVRR has potential for considerable long-term growth, but is likely far too great of a risk at its current valuation.


Special Offers from Schaeffer's Trading Partners