By Sam Boughedda
Fiverr International (NYSE:FVRR) was initiated with a Buy rating and $50 per share price target by BTIG analysts on Monday.
The analysts see the stock as an "opportunity to buy a high-quality platform with a bright future," as Fiverr is the "purest way to play the attractive online freelancing opportunity with the lowest execution risk."
"Like other work-from-home plays, FVRR shares have had a rough go of it over the past 2+ years and are now only ~30% above the pre-pandemic stock price, slightly less than the NASDAQ's gain," explained the analysts.
"The deep pullback in the stock belies the substantial improvement in fundamentals, which include revenue for 2023 tracking over 60% higher than was expected before the pandemic, over 30 percentage points of EBITDA margin expansion, a more robust product offering, and a step-function increase in business acceptance of remote/contingent work."
BTIG believes FVRR shares are "at an attractive level," with the $50 price target representing a potential 45% upside.
The analysts said factors supporting the firm's bullish stance on the stock include online freelancing only scratching the surface of its market opportunity, multiple secular growth drivers, a highly fragmented space where Fiverr is in an advantaged position, high freelancer satisfaction with Fiverr, and attractive unit economics.
"Additionally, we view management as proven operators who are laser-focused on the core offering and aren't moving into other areas of staffing (whereas some peers are), limiting execution risk," they added. "We believe investors will be rewarded in due course and can afford to wait given the stock's decline has resulted in a defensible 3.4% FCF yield (on a par with the 10-year Treasury) and a variable cost structure that adds resilience to margins."