1. Fiverr (NYSE:FVRR)
Short Interest as % of Shares Outstanding: 17.31%
Number of Hedge Fund Investors in Q2 2024: 19
Fiverr (NYSE:FVRR) is an Israeli company that operates a global marketplace for freelance services, connecting freelancers with clients worldwide. The company’s platform caters to both individuals and businesses seeking to outsource various tasks.
Fiverr (NYSE:FVRR) has introduced AI-driven tools such as Neo and has launched a profession-based catalog that lets freelancers showcase their unique skills and expertise more effectively. The company also launched a profession-based catalog, that lets freelancers showcase their skills and expertise more effectively.
According to a report from the Business Research Company, the global freelance platforms market at $7.49 billion in 2024, with projections to reach $13.92 billion by 2028, growing at a CAGR of 16.8%. Fiverr (NYSE: FVRR), with its strong global presence and wide range of freelance services, is well-positioned to benefit from the rapid growth of the freelance platform market and the rising demand for flexible, on-demand work solutions.
On July 31, as a strategic move to enhance its eCommerce offerings, Fiverr (NYSE:FVRR) announced the acquisition of AutoDS, a leading dropshipping automation tool that provides a subscription-based platform that helps drop shippers with product research, sourcing, inventory management, and automated fulfillment. This acquisition benefits Fiverr by a new subscription revenue stream and creating strong synergies for accelerated growth in its dropshipping and e-commerce services.
It also brings tens of thousands of drop shippers into Fiverr’s (NYSE:FVRR) ecosystem, expanding its customer base and increasing its presence in the growing e-commerce market. Additionally, Fiverr (NYSE:FVRR) is transforming from a freelance marketplace to a comprehensive digital platform, offering both access to talent and software solutions. As the global dropshipping market is projected to surpass $2 trillion by 2033, this acquisition strengthens Fiverr’s (NYSE:FVRR) position to capitalize on the expanding industry.
For Q2 2024, Fiverr (NYSE:FVRR) reported a revenue of $94 million, marking a 6% increase year-over-year. The company’s gross margin rose to 83.1%, up from 82.5% the previous year. Although the number of active buyers fell by 8% to 3.9 million, Buyer Spend per Active User grew by 10%. Free cash flow also saw a 12% year-over-year increase, reaching $20.7 million.
While 17.37% of the company’s shares are shorted, 19 hedge funds have maintained a bullish sentiment on the stock, with stakes worth $90.53 million as of the second quarter. Engine Capital is the largest shareholder in the company, holding $19.07 million worth of stock as of June 30.
While we acknowledge the potential of Fiverr (NYSE:FVRR) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than FVRR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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