The Freelance marketplace has had a rough 2021. But is that set to change?
Summary: Faced with layoffs and inadequate work prospects due to the pandemic, thousands of people has started turn to the gig economy to take command of their income potential. Management provided revenue projections for 2021 at the end of last year, predicting a 47 percent increase to (a midpoint of) $280 million. However, as the communities are starting to open again, the investors of most popular freelance platform, Fiverr might not find this as good news.
After nearly 18 months of a global lockdown, the world is getting vaccinated and communities are gradually opening up. This is good news for society at large however in contrast, the investors of the stock Fiverr International (NYSE: FVRR) has had to grappled with mixed fortunes.
Source: Company Website
To recap, Fiverr is one of the most popular platforms for freelance knowledge workers whereby remuneration ranges between $5 to hundreds of dollars depending on the hours and complexity of task.
From the chart above we can see that this stock was one of the prime beneficiaries with the world going into a lockdown as many were forced to work online amidst massive layoffs. The stock was hovering around the $20 region pre lockdowns but went to a high of above $300. Recently however this stock tumbled to $177 as of 11 Oct 21 with the possibility of the pandemic ending soon.
Many are of the assumption that there is an earnings risk to the stock with people are spending more time outside of their homes and less time in front of screens as COVID restrictions are loosened. Reduced online activity results to fewer new customer cohorts and less activity for existing customer cohorts.
Important thing is, the long-term megatrend of freelancers doing digital stuff isn't going away, and Fiverr remains the dominant player in this crucial market.