Fiverr International (FVRR) just posted its third-quarter earnings, revealing 8% higher revenue and a jump in profitability compared to last year. Investors are watching as the company’s AI-driven strategy continues to shape its outlook.
Despite a strong third quarter and renewed optimism around Fiverr’s AI initiatives, the shares have struggled to find momentum this year, closing recently at $20.89. The 1-year total shareholder return stands at -29.6%, reflecting broader challenges in the sector and some investor hesitation. At the same time, earnings beats highlight operating improvements and new AI products are fueling growth expectations.
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With analysts maintaining upbeat price targets and the stock still well below last year’s highs, the key question is whether Fiverr is trading at a true discount, or if the market has already priced in the company’s future growth. Is this a buying opportunity, or does current sentiment reflect the outlook ahead?
Most Popular Narrative: 39% Undervalued
Fiverr International’s most followed narrative values the company at a striking premium to the last close, pointing to major upside. With the market price at $20.89, this perspective outlines a path for substantial appreciation, framing Fiverr’s evolving business model and AI investments as pivotal factors worth deeper consideration.
Fiverr International’s introduction of AI-powered tools such as Dynamic Matching and Neo (AI-powered smart matching) is expected to significantly enhance sales and earnings. These tools cater to businesses requiring tailored and complex projects, leading to larger transactions. For instance, projects utilizing these tools are reported to be several times larger than typical projects on the platform. Additionally, Fiverr Pro has been instrumental in capturing enterprise budgets, with buyers spending over $10,000 annually continuing to grow, contributing to an overall 9% year-over-year increase in spend per buyer, which reached $296 in Q3 2024.
Read the complete narrative.
Curious about the bold drivers behind this premium valuation? One surprising assumption about profit margins and a crucial shift in customer spend could change everything for Fiverr’s outlook. See what sets this narrative apart from a standard peer comparison. What is hidden in the growth math might surprise you.
However, slower adoption of AI tools or weak sentiment among small businesses could quickly challenge these bullish expectations and shift the narrative for Fiverr.
Another View: Market Multiples Tell a Different Story
While the narrative points to undervaluation, a traditional price-to-earnings comparison paints a much less optimistic picture. Fiverr trades at 34.5x earnings, which is significantly above the US Professional Services industry at 24.4x and its peer average of 34.1x. Even when compared to the fair ratio of 34.7x, it is quite close. This raises the risk that the market is already expecting strong growth, so is there really a margin of safety left for investors?
Build Your Own Fiverr International Narrative
Feel free to dig into the numbers and build your own perspective. Shaping your own narrative for Fiverr International takes just a few minutes. Do it your way
A great starting point for your Fiverr International research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
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