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Investing.com - Upwork Inc. (NASDAQ:UPWK) maintained its Neutral rating from BTIG following the company’s Investor Day in New York City, where management unveiled "the New Upwork " and shared three-year financial targets. The freelance marketplace platform, currently valued at $2.23 billion, appears undervalued according to InvestingPro Fair Value estimates.
The freelance marketplace platform announced ambitious growth projections, targeting annualized growth of 7-9% for Gross Services Value (GSV), 13-15% for revenue, and approximately 20% for Adjusted EBITDA through 2028. These targets suggest 2028 revenue of $1.13-$1.20 billion and Adjusted EBITDA of $384-$389 million, representing margins between 32.5-34.0%. Notably, Upwork already boasts impressive gross profit margins of 77.8% as of the latest twelve months, according to InvestingPro data, providing a solid foundation for these growth targets.
Upwork expects its take-rate to increase to approximately 23% by 2028, compared to roughly 20% in the third quarter of 2025. The company emphasized these targets do not rely on macroeconomic improvements and exceed current Street estimates, which project 2028 GSV of $4.7 billion, revenue of $937 million, and Adjusted EBITDA of $289 million. With a current P/E ratio of just 9.94 and a strong financial position where liquid assets exceed short-term obligations (current ratio of 1.44), the company appears well-positioned to pursue these ambitious targets.
The company’s Lifted subsidiary, which will begin ramping up in the second half of 2026, is expected to be the main driver of growth in 2027 and 2028. This timing allows Upwork to close enterprise deals currently in the RFP phase and begin scaling them, potentially pushing GSV growth into double-digits for those years.
Upwork also disclosed that AI-related GSV is expected to exit 2025 at a $300 million run-rate, representing 7-8% of total GSV and growing more than 50% year-over-year. The company provided an example of a pharmaceutical client where Upwork currently accesses only 5% of its $1 billion contingent labor spend, highlighting significant expansion opportunities with its full-spectrum offering.
In other recent news, Upwork Inc. reported revenue of $202 million for its latest quarter, marking a 4% year-over-year growth and surpassing analyst expectations by 4%. The company’s adjusted EBITDA reached $60 million, approximately 20% above consensus estimates, with margins achieving a record 30%. During its Investor Day, Upwork outlined its long-term growth strategy, forecasting double-digit compound annual growth rates for revenue and adjusted EBITDA through 2028. The company aims to capture a larger portion of the $1.3 trillion global digital knowledge work market through initiatives focusing on AI, small and medium businesses, and enterprise solutions.
Following these developments, several financial firms have adjusted their price targets for Upwork. Goldman Sachs raised its target to $28, maintaining a Buy rating, while UBS increased its target to $23, also with a Buy rating, citing positive growth in Gross Services Value (GSV). Jefferies raised its price target to $22, highlighting a "positive turning point" for Upwork as GSV growth turned positive at 2% year-over-year. Scotiabank adjusted its target to $17, maintaining a Sector Perform rating, noting the company’s profitability beat. These updates reflect a generally optimistic outlook from analysts regarding Upwork’s future prospects.
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