Is Fiverr a buy?
It’s time to talk about a high-flying technology name. Here is the breakdown on $FVRR, otherwise known as Fiverr.
Current Price: $210.85
52/Wk High: $213.20
52/Wk Low: $20.42
Market Cap: $6.71 Billion
Read below for the breakdown!
Fiverr is an online platform in which connects freelancers to businesses. Most of these freelancers specialize in digital services such as graphic design, marketing, and much more.
Fiverr currently has over 200 categories of work and offers services in more than 160 countries worldwide.
Throughout 2020 Fiverr stock has gone parabolic and continues to make higher highs. In fact, Fiverr has gone on a massive 792.21% rally throughout 2020 and as of today made another 52/wk high.
Digging into the numbers the stock has run for good reason, with Fiverr reporting consistent double-digit revenue growth and increasing buyer growth.
Taking a look at the third-quarter results Fiverr beat EPS expectations of $0.08, reporting an EPS of $0.12. Furthermore, revenues grew by 88% year over year to a whopping $52.3 million.
Fiverr went on to report that active buyers increased to 3.1 million, representing a strong 37% year over year increase in active buyers. For context, in Q3 2019 active buyers totaled 2.3 million.
The company also reported that spend per buyer increased by 20% year over year to a whopping $195 per buyer. The third quarter take rate continued to increase as well to 27%, representing an increase of 40 basis points year over year.
When it comes to gross margin (GAAP based) it once again increased to 83.4%, an increase of 440 basis points year over year. Adjusted EBITDA also increased to $4.2 million, a huge improvement over the Q3 2019 level of $-4.4 million.
Fiverr management also produced bullish guidance for both Q4 2020 and FY 2020. Management expects Q4 revenues to land within a range of $52.4 million to $53.4 million, representing a 71% to 81% increase.
For the full year, management expects revenues to total $186.0 million to $187.0 million, representing a 74% to 75% increase.
The balance sheet is nothing less than strong as well.
Total Debt: $4.672 million
Total Liabilities: $130.955 million
Total Assets: $419.787 million
Cash & Short Term Inv: $214.405 million
On the flip side, the valuation is quite expensive.
Price to Sales: 44.04x
Price to Book: 24.88x
Price to Cash Flow: 2,650.15x
When it comes to management, leadership has been effective but has room for improvement.
Return on Equity: -6.41%
Return on Assets: -4.31%
Return on Invested Capital: -6.27%
Given the numbers, the analysts are mixed with a mean price target of $184.60/share, representing a -11.84% downside.
It is also important to note that the high price target is $210.00/share, representing a 0.29% gain, while the low price target is $148.00/share, representing a -29.32% loss.
The big money is also quite involved with 58.54% of Fiverr being owned by institutions. Top holders include Bessemer Venture Partners, Franklin Advisers, and SRS Investment Management.
On a technical front Fiverr has been extremely bullish in recent weeks. According to the six-month charts, the MACD is trending sideways within a tight range around 8.81.
The six-month charts are also indicating an RSI of 62.53 and CCI of 125.51, both of which are on the high end. It is also important to note that $FVRR is at all-time highs.
In short, Fiverr is a strong long-term pick given consistent growth, the digital landscape, and the future, as well as increasing spend per customer. On the otherhand the stock is hitting new highs and waiting for a short-term pullback may be favored.
EAT - SLEEP - PROFIT
Disclaimer: This is not direct financial advice, simply an opinion based on independent research.