10 Worst ADR Stocks To Buy According to Short Sellers

2. Fiverr (NYSE:FVRR)  

Short Interest as % of Shares Outstanding: 17.31%

Number of Hedge Fund Investors in Q2 2024: 19

Fiverr (NYSE:FVRR) is based in Israel and is a global marketplace for freelance services. The platform connects freelancers with clients worldwide and is used by both individuals and businesses to outsource tasks.

According to a report by the Business Research Company, the freelance platforms market was valued at $7.49 billion in 2024 and is expected to reach $13.92 billion by 2028, growing at a CAGR of 16.8%. With its established global presence and diverse range of freelance services, Fiverr (NYSE:FVRR) is well-positioned to capitalize on the expanding freelance platform market’s strong growth and increasing demand for flexible, on-demand work solutions.

The company’s new product releases, such as the AI-powered Neo and the profession-based catalog, along with strategic acquisitions such as AutoDS, an app that automates the dropshipping process solidify the company’s position in the growing freelance and remote work sector. In Q2 2024, Fiverr (NYSE:FVRR) reported a revenue of of $94 million, a 6% increase year-over-year, with a gross margin of 83.1%, up from 82.5% the previous year. The company’s Buyer Spend per Active User grew by 10%, even though active buyers decreased by 8% to 3.9 million. Free cash flow increased 12% year-over-year to $20.7 million.

Fiverr’s (NYSE:FVRR) profession-based catalog is a game-changer in its transition to more complex and long-term freelance contracts. Management believes this will significantly expand the company’s total addressable market by attracting businesses with long-term hiring needs. Furthermore, Fiverr’s AI tool Neo enhances user experience by streamlining navigation and delivering tailored service recommendations, enabling clients to find freelancers more efficiently on the platform.

Fiverr (NYSE:FVRR) is trading 10.81 times its earnings, which is a 45% discount compared to the sector median of 19.89. Despite 17.31% of shares being shorted, 19 hedge funds showed a bullish stance on the stock as of the second quarter, with stocks worth $90.53 million.  Engine Capital is the largest shareholder in the company, holding $19.07 million worth of stock as of June 30. Industry analysts maintain a consensus Buy rating for the company’s stock, with an average price target of $31.90, representing a 20.64% upside potential from its current levels.