Fiverr’s Promise In 2024: Analyst Sees Upswing Despite Current Market Uncertainty

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UBS analyst Kunal Madhukar initiated coverage on the shares of Fiverr International Ltd (NYSE:FVRR) with a Buy rating and a price target of $33.

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The analyst believes FVRR’s volumes lead overall job listings by two or more quarters, and job listings have started stabilizing.

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Expectations are low, and while macro remains uncertain, the analyst sees scope for expectations and multiples to trend up as the outlook firms up in 2024.

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The analyst sees significant upside from current share prices despite assuming lower than seasonal GMV trends, flat take rates, flat gross margins, and a valuation multiple that is similar to that of Upwork Inc (NASDAQ:UPWK), which has historically traded at a discount to FVRR.

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UBS economists are projecting modest quarter-on-quarter decline in GDP in 4Q23 and 1Q24 before growing again starting in 2Q24, said the analyst.

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So, the analyst is projecting growth to begin reaccelerating in 2024, albeit at below historical seasonality levels through 2025. 

The analyst has valued the shares using a ~3x multiple on 2025E gross profits, which is consistent with the ~3x multiple the analyst uses for UPWK, but below the average multiple during the pre and post-COVID periods. 

Price Action: FVRR shares closed higher by 2.44% at $24.75 on Wednesday.

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