Upwork stock holds steady as RBC reiterates Sector Perform rating

Investing.com - RBC Capital maintained its Sector Perform rating and $21.00 price target on Upwork Inc. (NASDAQ:UPWK) following the company’s analyst day. According to InvestingPro data, this target aligns closely with Upwork ’s Fair Value assessment, suggesting the stock is currently slightly undervalued with trading at $17.20.

The freelance marketplace platform used its investor presentation to highlight its position in the fractionalized work market and outline how artificial intelligence serves as a key growth driver for the business. The company’s impressive 77.8% gross profit margin supports its ability to invest in AI initiatives while maintaining profitability.

Upwork shared long-term financial targets during the event, including guidance for a return to growth in both Gross Services Value (GSV) and revenue in 2026, with plans to reach 35% margin targets by 2029. The company appears well-positioned financially to pursue these goals, as InvestingPro data shows it holds more cash than debt on its balance sheet.

RBC Capital noted it remains "generally constructive" on Upwork’s improving trajectory, citing product developments and increased internal and external tailwinds from AI implementation, which led the firm to raise its 2026 estimates.

The investment bank indicated it needs "more confidence in the durable return to meaningful GSV growth" before considering a rating upgrade, while acknowledging the stock appears attractively valued at 8.6 times enterprise value to 2026 EBITDA.

In other recent news, Upwork Inc. has been the focus of several analyst reports and strategic announcements. The company recently presented its long-term growth strategy during its Investor Day, where it forecasted significant growth in gross service value (GSV) and projected double-digit compound annual growth rates for revenue and adjusted EBITDA through 2028. Upwork aims to capture a greater share of the $1.3 trillion global digital knowledge work market by enhancing its AI capabilities, expanding small and medium business (SMB) growth, and broadening enterprise solutions.

Goldman Sachs raised its price target for Upwork to $28, maintaining a Buy rating, citing the company’s growth outlook and strategic initiatives. Similarly, Canaccord Genuity increased its price target to $24 from $22, also maintaining a Buy rating, after attending the Investor Day and noting the company’s AI-native marketplace initiatives. Citizens reiterated its Market Outperform rating with a $27 price target, highlighting growth from AI and enterprise expansion.

BTIG maintained a Neutral rating but acknowledged Upwork’s ambitious growth targets, including annualized growth of 7-9% for GSV and 13-15% for revenue. These developments reflect Upwork’s strategic focus on leveraging AI, increasing adoption of Business Plus, and enhancing monetization through variable freelancer fees.

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