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Investing.com - Goldman Sachs raised its price target on Upwork Inc. (NASDAQ:UPWK) to $28.00 from $25.00 while maintaining a Buy rating following the company’s Investor Day on November 18. This new target represents a 64% upside from the current price of $17.09, with InvestingPro data showing the stock is currently trading below its Fair Value, despite an impressive 7.15% return over the past year.
During the event, Upwork management outlined its strategy to address the $1.3 trillion total addressable market for global digital knowledge work through three strategic growth pillars: AI, SMB, and Enterprise solutions. The company’s approach is supported by its robust financial foundation, with InvestingPro data revealing impressive 77.8% gross profit margins and a healthy balance sheet where cash exceeds debt.
The company presented its AI initiatives, including Uma workflows on the Marketplace, expanding AI category penetration, and integrating AI agents on the platform. For small and medium businesses, Upwork highlighted how its Business Plus offering attracts higher-spending SMB customers with stronger retention rates.
Upwork also introduced Lifted, its new Enterprise offering that provides large organizations with a full-stack, compliant solution for sourcing, contracting, managing, and paying contingent talent across major contract types.
The company unveiled new three-year financial targets for 2025-2028, projecting 7-9% compound annual growth rate (CAGR) for Gross Services Value, 13-15% CAGR for revenue, and approximately 20% CAGR for adjusted EBITDA, all exceeding previous Goldman Sachs and Street estimates.
In other recent news, Upwork Inc. has outlined its long-term growth strategy and financial targets through 2028, forecasting acceleration in gross service value (GSV) and double-digit compound annual growth rates for revenue and adjusted EBITDA. The company aims to capture a larger share of the global digital knowledge work market by focusing on transforming human and AI work, accelerating growth in small and medium businesses, and expanding enterprise offerings. Upwork reported revenue of $202 million for the latest quarter, a 4% increase year-over-year, surpassing analyst expectations. Adjusted EBITDA reached $60 million, approximately 20% above consensus estimates, with margins hitting a record 30%.
Analysts have responded positively to these developments. UBS raised its price target for Upwork to $23, citing the company’s return to positive GSV growth. Jefferies also increased its price target to $22, highlighting a "positive turning point" for Upwork in the third quarter. Scotiabank adjusted its price target to $17, noting the company’s profitability beat. Additionally, RBC Capital raised its price target to $21, acknowledging that artificial intelligence is becoming more of a tailwind for the company. These recent developments reflect a growing confidence among analysts in Upwork’s strategic direction and financial performance.
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