Citizens JMP reiterates Fiverr stock with $36 target

On Wednesday, Citizens JMP analyst Andrew Boone reaffirmed a Market Outperform rating with a $36.00 price target for Fiverr International Ltd . (NYSE:FVRR), maintaining a positive outlook on the company’s future. According to InvestingPro data, Fiverr currently appears undervalued, with analysts setting targets ranging from $30 to $41. The company boasts a perfect Piotroski Score of 9, indicating strong financial health. Boone highlighted the evolving landscape of the freelance marketplace, where Fiverr and its competitor Upwork (NYSE:NASDAQ:UPWK) are both shifting towards offering managed services that incorporate artificial intelligence (AI).

The analyst noted that both Fiverr and Upwork have been vocal about their product development strategies, which are increasingly geared towards integrating AI to handle part of the workload. This strategic shift comes as Fiverr maintains impressive gross profit margins of 82.65% and demonstrates solid revenue growth of 7.45% over the last twelve months. According to Boone, while AI takes on some tasks, freelancers are expected to contribute by editing and verifying the AI’s output. This collaboration between AI and human freelancers is anticipated to change the value proposition of certain service categories, as the human element focuses more on oversight rather than complete creation.

Boone also pointed out that Fiverr’s approach seems to be more tailored to individual freelancers. Despite the shift in the role of human work, the analyst believes that the increase in productivity driven by AI will ultimately lead to the creation of more jobs over time. Additionally, Fiverr’s diverse monetization strategies, which now include the newly announced AI tools, are expected to continue enhancing the company’s revenue share.

The commentary from Citizens JMP comes as both Fiverr and Upwork adapt to the changing dynamics of the freelance industry, where technology and AI are playing increasingly significant roles. As these platforms evolve, they are expected to offer more efficient services that benefit from the synergy between AI capabilities and human expertise.

Fiverr’s stock price target of $36.00 by Citizens JMP reflects confidence in the company’s ability to capitalize on these industry changes and leverage AI to drive growth. The firm’s continued focus on innovation and monetization is anticipated to sustain its competitive edge in the freelance marketplace. InvestingPro analysis reveals seven analysts have recently revised their earnings expectations upward, with the company expected to remain profitable this year. For deeper insights into Fiverr’s financial health and growth prospects, including over a dozen additional ProTips, check out the comprehensive Pro Research Report available on InvestingPro.

In other recent news, Fiverr International Ltd. has announced significant developments. The company unveiled Fiverr Go, an artificial intelligence platform designed to enhance the creative economy by prioritizing the rights and compensation of creators. Along with this, Fiverr also announced its Freelancer Equity Program, an initiative to grant top-performing freelancers shares in the company.

On the financial side, JMP Securities highlighted Fiverr’s goal for EBITDA margins, with the company targeting 25% by 2027. The firm expressed confidence in Fiverr’s strategic spending, suggesting that if maintained, the company’s EBITDA could potentially exceed expectations within the next two to three years.

Meanwhile, RBC Capital raised its price target for Fiverr from $28 to $35, maintaining its Sector Perform rating on the stock. The firm acknowledged Fiverr’s strong position in the freelance marketplace and its effective platform design, although it expressed caution regarding the stock’s current valuation due to high investor expectations for the company’s growth. These are all recent developments that continue to shape Fiverr’s trajectory.

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