Investment bank UBS has begun covering the shares of Israeli gig economy platform Fiverr International Ltd. (NYSE: FVRR), which held its IPO on Wall Street last month, and has seen its share price rise by 30% since then. UBS analysts think that the share's current price reflects a balanced risk-opportunity ration and gives a "Neutral" recommendation on the share. UBS sees a target price of $29, 6.4% above Friday's closing price of $27.25, giving a market cap of $844.6 million.
Fiverr has developed an online platform in which freelancers offer services in more than 200 categories in the gig economy, among them graphic design, marketing and communications, writing, translation, copywriting, and software development.
UBS managing director equity research Eric Sheridan believes Fiverr has broad opportunities to expand its business in an $83 billion market in the US, as well as to other countries. He thinks that the gig economy freelancer platform market is still in diapers compared with other industries and that trends support Fiverr. Consequently, he believes that the company can grow at 20% per year over the next five years and swing to a positive EBITDA. He observes that in 2018, Fiverr had negative EBITDA of $21 million, and forecasts that by 2022 and 2023, the company will reach positive EBITDA of $2 million and $19 million, respectively.
UBS's Sheridan mentions that 15% of the self-employed use some sort of digital platform but the overall penetration of online into the freelancer market is just 3%.
In the first quarter of 2019, Fiverr reported revenue of $23.8 million and a net loss of $8.3 million.
Published by Globes, Israel business news - en.globes.co.il - on July 8, 2019
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