Upwork (UPWK): Assessing Valuation After Labor Market Slowdown and Launch of Lifted Subsidiary

If you are trying to figure out what to do with Upwork (UPWK) shares after the latest market headlines, you are not alone. The company’s stock just slipped 4.8% following a report that the U.S. labor market is losing steam, with fewer jobs created in August than most expected. Since Upwork connects businesses with freelance talent, this change in the broader jobs landscape could ripple through to Upwork’s core business and fuel debate about where future demand is headed.

Still, this isn’t the only move Upwork has made recently. The company just announced the launch of Lifted, a subsidiary aimed at serving enterprise clients, in an effort to broaden its reach beyond its traditional freelance marketplace. After surging nearly 70% over the past year, the recent dip contrasts with the stock’s momentum through most of 2025. The share price has fluctuated in response to both company news and wider market sentiment. In this context, investors have to weigh possible headwinds against Upwork’s push into new markets.

Is the pullback a chance to buy into Upwork at a discount, or has the market already factored in both the risks and growth plans ahead?

Most Popular Narrative: 14.7% Undervalued

According to the most widely followed narrative, Upwork shares are currently undervalued by nearly 15% compared to their calculated fair value. This valuation is anchored in projections of Upwork's future earnings growth, evolving profit margins, and shifts in its enterprise business model.

Upwork's accelerated investment in AI-powered talent matching and workflow automation is already increasing average spend per contract and improving user experience for both clients and freelancers. This provides a clear path to higher revenue and improved gross margins as these enhancements scale.

Want to peek under the hood and find out why analysts think the market has it wrong? The secret sauce behind this bullish scenario includes bold forecasts on revenue, profit margins, and new client growth that flip Upwork’s valuation story on its head. Curious to see which crucial financial levers they believe will transform Upwork’s value in the years ahead? The math underlying this price target just might surprise you.

Result: Fair Value of $18.70 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent uncertainty in client acquisition and increased reliance on enterprise customers could challenge Upwork’s projected revenue and long-term growth trajectory.

Find out about the key risks to this Upwork narrative.

Another View: What Does the SWS DCF Model Say?

Taking a step back from analyst price targets, our DCF model offers a different perspective and suggests Upwork could be even more undervalued than the market thinks. The question is whether this alternative approach better reflects reality or if it is too optimistic.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Upwork for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Upwork Narrative

Not convinced by the consensus or want to run the numbers your own way? You can craft a custom outlook using your own insights in just a few minutes. Do it your way

A great starting point for your Upwork research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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