Fiverr rises as Roth upgrades, see slightly good news, weak shares

Fiverr (NYSE:FVRR) rose 2.2% on Tuesday morning amid an upgrade by investment firm Roth MKM.

The firm raised its rating on the stock to Buy from Neutral, maintaining its $33 price target.

While Roth’s model remains unchanged, the firm is incrementally positive based on a recent survey, a pullback in the stock, “slightly” supportive micro trends and tailwinds from artificial intelligence, analyst Rohit Kulkarni said in an October 2 note.

The gig economy is likely to increase at a steady rate, with more than 50% of the U.S. workforce participating by 2027, according to Teamstage.io. That could mean a huge opportunity for growth at Fiverr (FVRR) as it remains a favorite among freelancers, even as it pulls in half as much revenue as rival Upwork (UPWK).

Roth prefers Upwork (UPWK) to Fiverr (FVRR) over the medium-term but it’s a good time to Buy the latter.

Fiverr leads the pack in overall satisfaction levels and likelihood to recommend marketplaces among freelancers, followed by Upwork and Freelancer.com (OTCQX:FLNCF), the firm said, adding that it saw a marginally positive spend outlook among all corporate buyers.

Other positives include AI-related offerings that are starting to garner attention from business owners and revamped enterprise offerings that include support for freelancers. Finally, recent macro trends including hiring in tech companies and small business formation hint at a stable and perhaps even improving economy that matter to gig companies.

Fiverr (FVRR) is down 14% year-to-date.

Analysts are largely bullish on Fiverr (FVRR). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts also rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates the company a HOLD.