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Fiverr: Freelancing faces slowing growth despite steps taken into AI

WA
WallStreetWontons
Community Contributor

Published

December 14 2023

Updated

July 11 2024

Narratives are currently in beta

Catalysts

Products or Services Impacting Sales and Earnings:

Industry Tailwinds

In summary, Fiverr’s strategic focus on complex services, AI, and flexible workforce models positions it well for growth, while industry tailwinds like AI adoption and cybersecurity awareness provide additional support.

Risks

  • Market Saturation: As Fiverr expands, it may face saturation in certain markets or services. If demand plateaus, growth could slow down.
  • Competition: Rival platforms (e.g., Upwork, Freelancer) pose a threat. If they innovate faster or attract more freelancers and buyers, Fiverr’s growth could be affected. Upwork has a much larger share in the Freelance space without bound to cutting prices.
  • Economic Cycles: Economic downturns can reduce businesses’ spending on freelancers, impacting Fiverr’s revenue.
  • Dependency on Gig Economy Trends: If the gig economy shifts away from freelancing, Fiverr’s growth may stall.
  • Regulatory and Competitor Risks:
    • Regulatory Changes: New regulations (e.g., labor laws, tax policies) could impact Fiverr’s business model or increase compliance costs.
    • Worker Classification: The ongoing debate about freelancer classification (employee vs. independent contractor) could affect Fiverr’s operations.
    • Platform Reliability: Any major service disruptions, security breaches, or technical issues could erode trust and drive users to competitors.
    • Intellectual Property Challenges: Legal disputes related to copyrighted content or trademark infringement could harm Fiverr’s reputation and finances.

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Fair Value
US$21.5
42.9% overvalued intrinsic discount
WallStreetWontons's Fair Value
Future estimation in
PastFuture0100m200m300m400m500m2017201920212023202520272028Revenue US$519.4mEarnings US$12.4m
% p.a.
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Increase
Current revenue growth rate
9.32%
Professional Services revenue growth rate
0.22%
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