Jefferies raises Upwork stock price target to $22 on growth acceleration

Investing.com - Jefferies raised its price target on Upwork Inc. (NASDAQ:UPWK) to $22.00 from $20.00 while maintaining a Buy rating on the freelance marketplace platform. This aligns with the broader analyst consensus, which remains bullish with an average rating of 1.91 (where 1 is Strong Buy) and analyst price targets ranging from $15 to $27, according to InvestingPro data.

The firm cited a "positive turning point" for Upwork in the third quarter, noting that Gross Service Value (GSV) growth turned positive at 2% year-over-year after five consecutive negative quarters, despite operating in a soft labor market. This improvement comes as Upwork has maintained impressive gross profit margins of 77.9% over the last twelve months.

Jefferies expects growth acceleration in fiscal year 2026, driven by multiple factors including AI-related projects, which saw GSV increase 53% year-over-year in the third quarter.

Additional growth drivers identified include the company’s Business Plus subscription tier gaining traction among small and medium-sized businesses, with GSV for this segment growing 33% quarter-over-quarter, along with refreshed enterprise solutions.

The firm highlighted Upwork’s current valuation at 2.3x calendar year 2026 enterprise value to sales ratio, which sits below its historical average of 4.4x, supporting the Buy rating and higher price target. Currently trading at a P/E ratio of 9.34, Upwork appears undervalued according to InvestingPro’s Fair Value model. The company has been profitable over the last twelve months with a diluted EPS of $1.72 and strong return on assets of 21.6%.Investors seeking deeper insights can access Upwork’s comprehensive Pro Research Report, one of 1,400+ available on InvestingPro, which includes additional financial health metrics and 10 ProTips highlighting the company’s strengths and potential risks.

In other recent news, Upwork Inc. reported impressive third-quarter 2025 financial results, surpassing analysts’ expectations. The company posted an earnings per share (EPS) of $0.36, significantly higher than the anticipated $0.28, and revenue reached $201.7 million, exceeding the forecasted $193.35 million. In response to these results, Goldman Sachs raised its price target for Upwork to $25, maintaining a Buy rating, highlighting contributions from AI categories and product enhancements. Canaccord Genuity also reiterated its Buy rating with a $22 price target, noting strong performance in revenue and profitability metrics. The firm observed a return to growth in Upwork’s Gross Service Value (GSV), driven by AI investments, with AI-related work growing 53% year-over-year. RBC Capital, while maintaining a Sector Perform rating, increased its price target to $21, citing positive signs in Upwork’s Q3 performance and accelerated GSV growth. These developments underscore the company’s strategic focus on AI as a significant growth driver.

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