Citi analyst Ronald Josey maintained a Buy rating on Fiverr International yesterday and set a price target of $33.00.
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Ronald Josey has given his Buy rating due to a combination of factors that highlight Fiverr International’s potential for growth despite a challenging macroeconomic environment. The company’s strategic shift towards more complex, upmarket projects and its significant investments in AI technologies, such as Fiverr Go, Neo, and Dynamic Matching, are expected to drive consistent growth in gross merchandise volume (GMV) over time. The increasing demand for AI services, which has grown 5-10 times over the past six months, and the fact that over 50% of transactions now exceed $200, indicate a focus on larger buyers and more sophisticated projects.
Furthermore, Fiverr’s EBITDA margins have reached approximately 20% in the third quarter, supported by strong free cash flow and AI adoption. Despite a decline in buyer growth, the company is successfully attracting more sophisticated buyers, which should enhance demand and revenue stability. Although the target price has been adjusted to $33 from $40 to reflect the current market challenges, the overall outlook remains positive, with Fiverr’s innovative strategies and service expansions, such as the new AI-powered Shopify Store Builder, contributing to its robust revenue growth.
In another report released today, Roth MKM also reiterated a Buy rating on the stock with a $32.00 price target.