Fiverr Analysts Boost Price Targets Expecting Cohorts And Macro To Stabilize In 2023
Benzinga
Feb. 23, 2023, 01:30 PM
- Needham analyst Bernie McTernan maintained Fiverr International Ltd (NYSE:FVRR) with a Buy and raised the price target from $40 to $50.
- The new target reflected a higher 2023 adjusted EBITDA estimate and a higher target multiple following the Q4 results.
- FY23 guidance surprised to the upside, expecting accelerating revenue growth throughout the year and delivering >100% incremental margins, pulling forward the longer-term targets.
- In FY24E, the analyst assumed FVRR could accelerate revenue by>20% while continuing to expand margins implying the macro moved from neutral and a headwind to a tailwind.
- RBC Capital analyst Brad Erickson maintained a Sector Perform and raised the price target from $33 to $40.
- FVRR's print was somewhat mixed, but a robust FY23 EBITDA guide-up appeared well-received by investors.
- Positively, FY23 estimates look somewhat de-risked, marketing expense discipline continues to improve, and maybe ChatGPT is not a headwind after all.
- Citigroup analyst Ronald Josey maintained a Buy and raised the price target from $45 to $58.
- The Q4 results impressed the analyst with stabilizing topline trends (despite limited visibility). He expected EBITDA margins to double to 14.5% in FY23 as the marketplace focused on improved efficiency while investing in growth.
- While the analyst watched the broader macro environment and noted newer cohort spending below historical levels due to macro, he believed the marketplace should see growing demand ahead of a broader recovery, with more unique products as margins expand materially.
- JMP Securities analyst Andrew Boone maintained a Market Perform and raised the price target from $50 to $55, with Q1 an inflection point for financials.
- The analyst believed there is an end in sight to macro headwinds and that cohorts are likely to stabilize in 2023, while 2022 new client revenue was up 8% Y/Y, although the macro results are likely to improve from here.
- Boone believed 2023 guidance implies further retention headwinds and saw a likely upside to profitability.
- While the analyst acknowledged shares were up 56% YTD, he believed there is a path back to 20% growth, and with increased cost discipline and marketing efficiency, Fiverr could be a "rule of 40" company by 2025.
- Guidance for 2023 looked conservative as cohorts reset through 2022, and Project Partner and new 3P distribution represented catalysts for 2023.
- Price Action: FVRR shares are trading lower by 7.37% at $41.58 on the last check Thursday.
