On Wednesday, JPMorgan updated its outlook on Fiverr International Ltd . (NYSE:FVRR), increasing its price target to $31 from $30, while maintaining a Neutral rating on the stock. The adjustment follows Fiverr's report of second-quarter results that met expectations and a forecast for a softer third quarter. Despite this, the company has uplifted the lower end of its 2024 revenue and EBITDA projections by $2 million, signaling an anticipated revenue acceleration in the fourth quarter as it continues to integrate AutoDS.
Fiverr's strategic investments in upmarket, complex services, and artificial intelligence are seen as drivers for growth, with AI having a net positive impact on the business. The company reported a 10% year-over-year growth in spending per buyer (SPB), which was attributed to solid execution and the acquisition of higher quality buyers. This growth comes in contrast to an 8% year-over-year decline in active buyer growth (AB).
The report from JPMorgan suggests that while the current operating environment is challenging, Fiverr is positioning itself to return to a healthy growth trajectory with improved profitability over time. The analyst believes that Fiverr is likely to benefit early from an improvement in the environment for small and medium-sized businesses (SMBs).
The financial firm is taking a cautious stance, staying Neutral until there are signs of an improving macroeconomic backdrop combined with continued strong execution from Fiverr. The December 2025 price target of $31 is based on an approximate 8.0x multiple of the estimated 2026 Adjusted EBITDA of $105 million.
In other recent news, Fiverr International Ltd. has reported strong first-quarter earnings for 2024, surpassing expectations with revenue reaching $93.5 million, a 6.3% growth year-over-year. This was largely due to a double-digit increase in Complex Services, reflecting a successful shift towards larger customers and complex service offerings. The company also reported a robust adjusted EBITDA of $16 million.
UBS has resumed coverage on Fiverr, assigning a Neutral rating and setting a price target of $25.00. The firm highlighted Fiverr's strategic focus on attracting higher-spend buyers and expects modest gross merchandise volume growth in the coming years. Investment firm Needham responded to Fiverr's strong results by raising its price target for Fiverr shares from $33 to $36, maintaining a Buy rating.
In light of recent developments, Fiverr has raised its revenue guidance for the full year to between $381 million and $387 million. The company's AI matching assistant, Fiverr Neo, has contributed to higher engagement and conversion rates. Fiverr's strong financial performance and its commitment to delivering value to shareholders underscore the positive outlook provided by investment firms.
InvestingPro Insights
In light of JPMorgan's updated outlook on Fiverr International Ltd. (NYSE:FVRR), InvestingPro data and tips offer additional context for investors considering the company's stock. Fiverr holds a market capitalization of $1.01 billion, demonstrating significant size within its sector. The company's gross profit margin impressively stands at 83.2% for the last twelve months as of Q1 2024, which underscores the efficiency of its business model and aligns with the strategic investments highlighted by JPMorgan. Despite a high P/E ratio of 116.14, the PEG ratio of 0.85 suggests that Fiverr's earnings growth may not be fully reflected in its current stock price.
Among the InvestingPro Tips, it's noteworthy that Fiverr is expected to become profitable this year, with net income anticipated to grow. This tip resonates with the report's mention of Fiverr's uplifted revenue and EBITDA projections, indicating a positive outlook on the company's earning potential. Additionally, Fiverr's cash position is strong, as it holds more cash than debt, providing financial stability and flexibility. For investors seeking more comprehensive analysis, there are 9 additional InvestingPro Tips available for Fiverr on InvestingPro, which could further inform investment decisions.
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