In this article, we will take a look at the 11 Best Gig Economy Stocks to Buy According to Hedge Funds.
During the COVID-19 pandemic, the gig economy stocks experienced one of the most profitable periods. As remote work opportunities increased, individuals and freelancers took advantage of the growing gig economy trend. However, post-pandemic the gig economy stocks came back to their normal trend. Still, the remote culture got a massive push that continues to grow and support most of the gig economy companies today.
Also Read: Jim Cramer Discusses These 11 Stocks & President Trump’s Sovereign Wealth Fund
According to the report from ResearchAndMarkets, the global market for freelance platforms is expected to reach $13.8 billion by 2030, growing from $4.8 billion in 2023. Whereas, research from Payoneer shows that the U.S. and the U.K. are two of the top destinations for freelancers, with diverse markets offering a range of opportunities for freelancers. Brazil, Pakistan, Ukraine, and the Philippines are also top locations with large and highly skilled workforces that support the global freelance market.
Asia remains one of the fast-growing freelance markets backed by India, Bangladesh, Pakistan, Ukraine, and the Philippines, with a large pool of talented workers and a burgeoning tech industry. Russia and Serbia are also experiencing a surge in freelancers, with more businesses looking for freelance contractors.
The North American market remains the highest-paid market for remote or freelance work. The average hourly rate in North America is around $44, while Western Europe follows next with an average per-hour rate of $31. Freelancers in Asia earn around $22 per hour on average, as per the report.
The growing freelance market and remote work are driving the gig economy and it can be a great time to invest in gig economy stocks. With that, let’s take a look at the 11 Best Gig Economy Stocks to Buy According to Hedge Funds.
Photo by Brett Jordan on Unsplash
Our Methodology
We shifted through ETFs and online rankings to compile a list of gig economy stocks. We have selected the 11 gig economy stocks to buy with the highest number of hedge fund holders, as of Q3 2024. The stocks are ranked in ascending order based on hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
11 Best Gig Economy Stocks to Buy According to Hedge Funds
11. Upwork Inc. (NASDAQ:UPWK)
No. of Hedge Fund Holders: 24
Upwork Inc. (NASDAQ:UPWK) is a communication services company that operates a global freelancing platform, connecting various businesses with individuals and agencies. With the gig economy continuing to expand, the company is well-positioned to benefit from this structural shift in the labour market. Upwork reportedly holds the largest market share in the global freelance market.
On January 6, Jefferies analyst Brent Thill upgraded the price target on UPWK shares from $19 to $20, maintaining a Buy rating on the stock. The analyst shared thoughts on Upwork, stating that a seasonally challenging Q1 leads the firm to believe in a more cautious, selective approach heading into 2025. However, Thill expects the company to accelerate in the second half of 2025, driven by more contributions from AI and as “positive revisions on conservative guidance come through.”
In Q3 2024, Upwork Inc. (NASDAQ:UPWK) posted record net income and a 193% rise in FCF, driven by its one-off billing schedule and cost-reduction initiatives. The company is also focusing on driving the audience towards its newly launched Business Plus membership, targeting to attract more consistent client spending. The company is expected to generate between $756 million and $761 million in revenues for the full year 2024, up by nearly 9.7% or 10.4% year-over-year.
10. Payoneer Global Inc. (NASDAQ:PAYO)
No. of Hedge Fund Holders: 30
Payoneer Global Inc. (NASDAQ:PAYO) is a financial technology company that allows SMBs to make transactions and do business globally. The company has penetrated global markets, particularly in emerging markets, to meet the demand for online payments. The company has built its market around SMBs and manages their cross-border and other needs from a single platform. Payoneer supports over 100 banking and payment service providers internationally.
On February 3, Deutsche Bank analyst Nate Svensson initiated coverage on PAYO shares with a Buy rating and a price target of $13 per share. The analyst initiated the rating on the stock highlighting the company’s strong positioning in cross-border fintech services for SMBs. Payoneer operates in over 190 countries and serves more than 2 million active customers, which allows the firm to benefit from key fintech trends. Svensson stated that the firm has the potential to accelerate core revenue growth beyond 2025. The analyst also cited risks including the company’s exposure to macro-sensitive micro-SMBs in emerging markets.
On the back of strong performance in the third quarter of 2024, Payoneer Global Inc. (NASDAQ:PAYO) increased the full-year 2024 guidance for revenue and adjusted EBITDA by $30 million. In Q3, the company posted a record-breaking quarter in both volume and revenue, with total volume soaring for a seventh consecutive quarter to 25%. The company’s B2B volume increased by 57% during the quarter, adding to Payoneer’s overall growth and revenue.
9. eBay Inc. (NASDAQ:EBAY)
No. of Hedge Fund Holders: 43
eBay Inc. (NASDAQ:EBAY) is a major e-commerce player that allows individuals and small business owners to operate their businesses from home. The company allows business owners to operate through the marketplace and connect with buyers and sellers globally, thus significantly facilitating the gig economy.
On January 3, Citigroup analyst Ygal Arounian reiterated a Buy rating on EBAY shares and kept a $75 price target for the shares. The analyst reaffirmed the rating on the stock following the announcement of a strategic partnership with Meta Platforms. eBay will integrate its listing into Facebook Marketplace, potentially broadening the company’s customer base.
In Q3 2024, eBay reported having 133 million active buyers on its platform. As Facebook boasts over 1 billion monthly visitors, eBay will benefit from such a large user base, indicating a substantial opportunity for growth. The company will control and manage all aspects of the transactions, from product inquiries to payment processing. Arounian believes that this collaboration will be a net positive for eBay and its B2C and C2C sellers.
The company’s projected revenue of between $2.5 billion and $2.6 billion for Q4 2024 is below the analysts’ estimates. However, heading into 2025, eBay Inc. (NASDAQ:EBAY) could potentially gain momentum following its partnership with Meta Platforms.
8. Etsy, Inc. (NASDAQ:ETSY)
No. of Hedge Fund Holders: 45
Etsy, Inc. (NASDAQ:ETSY) is an e-commerce company that operates two-sided online marketplaces that connect buyers and sellers. The company supports the global gig economy, just like eBay. The company’s e-commerce platform allows users to buy and sell new and used items, including musical instruments, jewelry, and accessories, clothing and shoes, home and living, among other items.
Etsy, Inc. (NASDAQ:ETSY) has created a niche in the retail sector with its marketplace specializing in unique and vintage goods. According to a recent survey by eRank, 52.7% of buyers said that they have been shopping on Etsy for over three years, indicating strong customer loyalty. This shows the value Etsy offers to its customers, driven by its unique and vintage product audience.
As a two-sided platform, Etsy, Inc. has 96.7 million active buyers on one side, and on the other, it has 8.5 million active sellers. The company generates revenue through a fee whenever a transaction takes place. Therefore, the company offers a network between the buyers and sellers. With a loyal customer base, Etsy benefits from a network effect.
Etsy, Inc. (NASDAQ:ETSY) could also benefit from Trump’s tariff policy. According to B. Riley Securities analyst Naved Khan, “a tariff-driven increase in import prices of goods sold on competitor marketplaces could lead to reduced promotional intensity and/or ad spending by these players, which could be incrementally beneficial to Etsy.” Khan added that the U.S.-based home furnishings retailer Wayfair, a competitor to Etsy, may take a hit by the tariffs. This may help Etsy in gaining more traffic in the coming quarters. Moreover, a limited amount of inventory is imported from China onto the Etsy platform, which may have little to no effect on Etsy.
7. Lyft, Inc. (NASDAQ:LYFT)
No. of Hedge Fund Holders: 51
Lyft, Inc. (NASDAQ:LYFT) is the second-largest ride-sharing business in the U.S. followed by Uber. Lyft operates under the same business model as Uber, but the company focuses on getting people to their destinations. The company also operates a bike and scooter share. Lyft facilitates the gig economy and offers a network of riders and drivers to easily connect through its app. As a service charge, Lyft takes a commission on every ride.
Lyft, Inc. in collaboration with autonomous driving developer Mobileye plans to launch robotaxis in Dallas, Texas, through this partnership as early as 2026. As this deal benefits Mobileye, it will also assist Lyft in cutting expenses and increasing its profit margins in the long term.
Wolfe Research analyst Shweta Khajuria has reiterated a Hold rating on LYFT shares and remains constructive on LYFT stock. Khajuria cited that the company has exceeded the high end of its bookings outlook for the first three quarters of 2024 and surpassed the high end of EBITDA guidance in each of the last 12 quarters. The analyst expects the company’s Q4 bookings to increase by 16.9% year-over-year compared to the consensus estimate of 15.7%, while expecting the EBITDA margin to grow 2.4% from a year ago, in line with the Street’s estimate.
Another analyst, Mike McGovern from Bank of America, kept a Buy rating on LYFT shares and reduced the price target from $21 to $19, considering the rising competition and uncertainty around autonomous vehicle adoption. However, overall analysts see LYFT holding its strong position as the Street might be overestimating the timeline for Waymo’s public launch.
6. Airbnb, Inc. (NASDAQ:ABNB)
No. of Hedge Fund Holders: 54
Airbnb, Inc. (NASDAQ:ABNB) is a company that operates an online platform, connecting homeowners and travelers. The platform allows travelers looking to book space during their travel. Airbnb allows homeowners to list their property or space on its platform for rent. The company has massively disrupted the hospitality industry.
On February 3, BofA analyst Justin Post lowered the price target on ABNB from $159 to $151, maintaining a Neutral rating on the stock. Post expects the company’s Q4 performance to be modest and remain consistent with guidance. The analyst highlighted Q1 bookings and night outlook to be a key driver for the company, where the Street estimates a growth of 9% each.
Airbnb is expected to report earnings of $0.59 per share in Q4 2024, which would be flat from a year ago. The revenue is projected to be around $2.4 billion, up by 9.2% year-over-year and in line with the company’s guidance. The company has shown solid performance in 2024, with nine-month revenue soaring by 12% year-over-year, as of Q3 2024. Moreover, the company’s operating cash flow also increased to $4.11 billion from $3.82 billion in the first nine months of 2023.
5. Maplebear Inc. (NASDAQ:CART)
No. of Hedge Fund Holders: 55
Maplebear Inc. (NASDAQ:CART), known as Instacart, offers gig workers with delivery work opportunities for its online grocery shopping services. The company’s operations span over 1,500 national, regional, and local retail banners and supports online shopping, delivery, and pickup services from more than 85,000 stores across North America.
On January 13, Morgan Stanley analyst Brian Nowak upgraded the price target on CART shares from $41 to $44 and kept an Equal Weight rating on the stock. Analysts are bullish on Maplebear Inc. (NASDAQ:CART) following strong Q3 2024 results, as the company surpassed the high end of guidance on both GTV and adjusted EBITDA. The company achieved a 39% year-over-year increase in adjusted EBITDA, showing strong profitability and operational efficiency.
Maplebear Inc. (NASDAQ:CART) is making advancements with notable investments in technology, including AI and deep retailer integrations. In addition to that, the company is also expanding its ads business, experiencing strong growth from emerging brands and creating new ad formats to attract demand.
4. Shopify Inc. (NYSE:SHOP)
No. of Hedge Fund Holders: 56
Shopify Inc. (NYSE:SHOP) is an e-commerce company that operates a platform that allows merchants to sell products through various sales channels. Based out of Canada, Shopify Inc. (NYSE:SHOP) has its unique place in the e-commerce sector, allowing merchants to set up digital storefronts. The company supports millions of small businesses and merchants, along with big brands including Nike and Red Bull.
On January 22, RBC Capital Markets maintained an Outperform rating on SHOP shares with a price target of $130. The company continues to deliver strong results and expand its global reach. The company surpassed the quarterly earnings estimate and posted an adjusted EPS of $0.44 in Q4 2024. The Q4 revenue increased by 31.2% year-over-year to $2.81 billion, beating the estimates. For the full year 2024, the company posted $300 billion in GMV and $9 billion in revenue, with revenue up by 26% year-over-year. The annual FCF margin soared by 18% from a year ago.
Shopify Inc.’s (NYSE:SHOP) solid market position and potential to scale across its total addressable market makes it a strong gig economy stock over the long term.
3. DoorDash, Inc. (NASDAQ:DASH)
No. of Hedge Fund Holders: 73
DoorDash, Inc. (NASDAQ:DASH) operates a commerce platform and connects merchants, consumers, and independent contractors for delivery services. The company’s platform services include DoorDash Drive and Wolt Drive, which are white-label delivery fulfillment services. DoorDash has captured a wide share in the food delivery market and continues to expand its network in this space.
On February 3, UBS analyst Lloyd Walmsley raised the price target on DASH shares from $182 to $200, maintaining a Neutral rating on the stock. JMP Securities also has a $200 price target on DASH shares, but they have kept a Market Outperform rating on the stock. The analysts are bullish on the stock as it posted a profit for the first time since going public in late 2020 and surpassed quarterly revenue estimates.
The Street expects the company to post earnings of $0.34 per share in Q4 2024, compared to a $0.39 per share loss from a year ago. The company’s sales are expected to rise by 23% year-over-year to $2.84 billion. Over the last six months, DoorDash, Inc. (NASDAQ:DASH) shares have surged over 55% as investors’ focus remains on the company’s profitability.
2. PayPal Holdings Inc. (NASDAQ:PYPL)
No. of Hedge Fund Holders: 90
PayPal Holdings Inc. (NASDAQ:PYPL) is a leading financial services company that supports freelancers and businesses in transferring funds globally. PayPal is one of the top contributors to the gig economy through its online payment services.
On February 10, Macquarie analyst Paul Golding maintained an Outperform rating on PYPL shares and raised the price target on the stock from $115 to $117. The analyst raised the price target on PayPal following its strong Q4 2024 results.
PayPal Holdings Inc. (NASDAQ:PYPL) posted a net revenue of $8.4 billion in Q4 2024, up by 4% year-over-year. The company’s transaction margin dollars soared by 7% from a year ago to $3.9 billion, reflecting strong operational efficiency. The company’s total payment volume was up by 7% year-over-year to $437.8 billion, indicating strong consumer engagement and transaction growth. In FY2024, the company’s total payment volume was around $1.68 trillion, up by 10% year-over-year.
1. Uber Technologies, Inc. (NYSE:UBER)
No. of Hedge Fund Holders:
Uber Technologies, Inc. (NYSE:UBER) offers ride-sharing and ride-hailing services through its platform. The company has the largest market share in its sector and massively supports the gig economy. The company maintains a strong position in the global and U.S. ride-hailing markets, sharing over 25% of the global market and a massive 76% share in the U.S. market. Uber’s massive network of over 171 million users and its large pool of drivers solidifies its position as a market leader.
On February 6, Cantor Fitzgerald analyst Reni Benjamin maintained an Overweight rating on UBER shares with a price target of $80. The analyst maintained this rating following the company’s strong results in Q4 2024. Uber Technologies, Inc. (NYSE:UBER) reported a significant rise in its Gross Bookings, which posted a year-over-year growth of 18% to $44.2 billion. The company’s Q4 2024 revenue reached $12 billion, exceeding the analyst estimate of $11.76 billion, driven by record demand in both the Mobility and Delivery segments. In addition to that, a remarkable increase of 122% year-over-year in FCF reflects Uber’s strong cash generation capabilities.
While we acknowledge the potential of UBER to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than UBER but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure. None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
