Is Fiverr Stock A Buy?

Fiverr is up more than a whopping 700% over the past year. Since its upward journey started in April of last year, the stock has more than sextupled its value for holders.

That’s nothing to sneeze at – in some ways, FVRR’s performance rivals other meteoric rises like that of Tesla, where prices gained some 400%-500% of gains within a year, prior to a five-to-one stock split and even more increases followed thereafter.

With the gig economy so much on everybody’s radar, is Fiverr stock a buy right now?

Fiverr Stock Technical Analysis

Fiverr is now towering above its 50-day and 200-day moving averages. When moving averages are used for support, they’re going to be next to useless here – at $250 per share, if Fiverr fell to its 200-day moving average, it would be cut in half.

Any way you slice and dice it, Fiverr is an expensive stock in today’s environment. A discounted cash flow analysis forecast reveals that fair market value lies at $184.56 per share.

Momentum is clearly in the favor of FVRR share price; the stock has just about 10x’ed its value from its 52-week low to its 52-week high.

But analysts appear less enthusiastic. Half rate the company a Hold and half rate it a Buy.

Fiverr Positivity Past, Present and Future

Fiverr has had impressive performance in the past, and potential upside in the future. It has branched out in the world, extending its geographic footprint, and the company has scaled well since its emergence as a publicly traded company in June 2019.

Another point is that there’s a certain amount of panache that some traders tend to attribute to companies based in Tel Aviv. That aside, though, FVRR’s star is clearly tied to the future of the gig economy.

Part of the enthusiasm among investors for FVRR stock is based on a burgeoning gig economy with more workers signing up to be taskrabbits.

FVRR share price has potential upside will correlate in large part to how gig workers are treated in the wake of the coronavirus pandemic.

The star of the gig worker has been rising for a while. Even before COVID-19, there was talk of less job security and more contractual work to replace the traditional model of putting someone in a seat for 40 hours a week and offering them health benefits.

But for those who don’t understand just how pervasive gig work has gotten, the gig economy accounts for a full 5% of US GDP, suggesting that it is not just a peripheral part of our world, but now, a central one.

The threats of automation, not to mention ongoing globalization, also feed into this idea that the old ways are dead, and contract-based work is the way of the future.

That’s a major part of what’s leading traders to contemplate buying into Fiverr and hoping that that the share price has not yet reached anywhere near its ceiling price.

As for metrics supporting bullishness on Fiverr, its revenue increases over the third quarter of 2020 are turning heads as considerable solid ballast for traders to expect further increases.

The revenues provide a way for FVRR enthusiasts to argue that the company’s long-term positions aren’t just based on hope, but on a solid business model poised for additional growth.

In general, traders are looking for safe havens. Both gold and cryptocurrency contend historically for that title, but traders who don’t like holding precious metals or dealing with cryptocurrency tax accounting may find it easier to put brokerage funds into FVRR and plan for the long term.

Is Fiverr Stock A Buy?: The Bottom Line

Fiverr certainly doesn’t fit into the category of value investing. Buying the stock at its current zenith might seem risky. However, the company has an aggressive revenue growth trajectory and, after a sluggish bottom line last year, earnings are set to play catch up in 2021.

The key is how traders feel about tomorrow’s workplace – is it going to be composed of traditional rat race drones doing 9 to 5’s, or intrepid contractors buying and selling tasks to make a living?

It’s hard to overstate the importance of American healthcare in this equation. Much of Fiverr’s business activity takes place in America, on one end of a contract or another, and it’s clear that a gig economy would help take over liability from employers who can’t afford to pay for their employees’ health care insurance plans.

However, it’s worth looking at whether the gig economy of the future is going to look like today’s, or whether it will be quite different.

Rivalry from new contenders could drag FVRR off its mountain, and new regulations or other changes may not jibe with the model that has led to the skyscraper stock advance that FVRR has experienced over the past year.

Still, for those who solidly believe that gig work is all but certain to continue, Fiverr’s gradual and steady gains provide an attractive option for growing capital and eventual profit taking.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.