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Investing.com - Citizens has reiterated its Market Outperform rating and $27.00 price target on Upwork Inc. (NASDAQ:UPWK), citing multiple growth catalysts for the freelance marketplace platform. Currently trading at $17.08, Upwork shares are at a modest P/E ratio of 9.94, suggesting potential upside from current levels.
The investment firm highlighted several potential growth drivers for Upwork, including AI-platform improvements, growth in AI-related categories, increasing Business Plus adoption, enterprise expansion through the company’s Lifted offering, and monetization enhancements such as a broader rollout of variable freelancer fees. The company maintains impressive gross profit margins of 77.8%, providing substantial room to invest in these growth initiatives.
Citizens noted that while Upwork’s guidance is weighted toward the latter half of the period, this primarily reflects the timing of Lifted’s contribution, as enterprise sales cycles typically range from 12 to 24 months.
The firm believes Lifted has the potential to more than double Upwork’s current enterprise business simply by expanding share of wallet within existing customers, making the company’s targets achievable.
With product-driven acceleration in top-line trends and expanding margins through improved marketing efficiency and fixed cost leverage, Citizens sees room for multiple expansion from the current 6.7x 2027E EBITDA as Upwork executes on its new targets. InvestingPro analysis suggests Upwork is currently undervalued, with analyst targets ranging from $17 to $28. For deeper insights into Upwork’s financial health, valuation metrics, and 11 additional ProTips, check out the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Upwork Inc. has been the subject of several analyst updates following its Investor Day. The company announced ambitious financial targets, aiming for annualized growth of 7-9% in Gross Services Value (GSV), 13-15% in revenue, and approximately 20% in Adjusted EBITDA through 2028. These projections suggest that by 2028, Upwork could achieve revenue between $1.13 billion and $1.20 billion, with Adjusted EBITDA margins of 32.5-34.0%. Canaccord Genuity raised its price target for Upwork to $24, citing the company’s AI-native marketplace initiatives as a driver for incremental GSV gains. Meanwhile, Goldman Sachs increased its price target to $28, highlighting Upwork’s strategy to address the $1.3 trillion global digital knowledge work market. UBS also raised its price target to $23, noting Upwork’s return to positive GSV growth, which surpassed their expectations. The company’s strategic focus includes transforming human and AI work, accelerating growth in the small and medium business sector, and expanding enterprise solutions. These developments reflect Upwork’s commitment to capturing a larger share of the digital knowledge work market.
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