Fiverr stock rating upgraded to Buy by BTIG on restructuring benefits

Investing.com - BTIG upgraded Fiverr International Ltd. (NYSE:FVRR) from Neutral to Buy on Friday, setting a price target of $31.00, which represents a 23% upside from Thursday’s closing price. The freelance marketplace platform, currently valued at $931 million, has demonstrated solid financial health with an impressive 81% gross profit margin, according to InvestingPro data.

The upgrade follows Fiverr’s Monday announcement of a significant restructuring that will reduce its workforce by approximately 30%, generating about $30 million in cost savings. Despite the substantial restructuring, Fiverr reiterated its guidance and emphasized that the changes are not in response to any business weakness. InvestingPro analysis shows the company maintains strong fundamentals with 12.6% revenue growth over the last twelve months and positive earnings expectations for this year.

BTIG noted that if Fiverr allowed all restructuring savings to flow to the bottom line, FY26E EBITDA would increase by approximately 30%, though the company’s commentary suggests it will reinvest about half of the savings to drive growth. The stock has only risen about 5% since the restructuring announcement.

The Federal Reserve’s interest rate cut this week is expected to prompt banks to lower lending rates, potentially benefiting Fiverr’s core small and medium-sized business clients who typically access capital through banks, potentially improving their outlook and hiring intentions.

BTIG also highlighted that Fiverr currently trades at a 55% discount to peer Upwork (NASDAQ:UPWK) on an FY26E EV/EBITDA basis, with Fiverr at 4.6x compared to Upwork’s 10.1x, creating room for multiple expansion despite Upwork’s strong execution justifying some premium.

In other recent news, Fiverr International Ltd . has announced a significant restructuring, which includes cutting approximately 250 jobs, about 30% of its workforce. This move is part of Fiverr’s strategic shift toward becoming an "AI-first company," focusing on creating a leaner organization with fewer management layers. Despite these changes, the company has reiterated its guidance for the third quarter and full year 2025. UBS has maintained a Neutral rating on Fiverr, noting expected gross cost savings of about $30 million from the workforce reduction. Oppenheimer has adjusted its price target for Fiverr to $30, down from $35, while maintaining an Outperform rating, in light of the company’s transition toward AI. JMP Securities continues to rate Fiverr as Market Perform, citing macroeconomic challenges and potential AI disruption, but acknowledges the restructuring is not due to weakened demand. These developments highlight Fiverr’s commitment to adapting to the evolving technological landscape while maintaining its financial projections.

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