Fiverr vs Upwork — Is There a Winner?

When it comes to finding (or sourcing) freelance work, Fiverr (NYSE: FVRR) and Upwork (NASDAQ: UPWK) have been the go-to destinations for years. Both of these businesses are now well-established — FVRR has a $1.07 billion market capitalization, while UPWK’s market cap is $1.76 billion.

In the grand scheme of things, those aren’t really large market caps, and qualify the companies as small caps — but in their industry, these are the two largest players. More to the point — both of them have a Zen Rating of A.

As a quick run-down, here’s what that means — according to an analysis of 115 proprietary factors, our rating system, which tracks some 4,600 equities, has put both of these stocks in the top 5%. Backtesting shows that stocks in this category have provided an average annualized return of 32.52% since 2003.

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It would be great if you could just invest in both companies — but since they’re direct competitors, that isn’t the wisest course of action. The only sensible thing to do is to contrast and compare them — and see which one has an edge over the other.

Let’s begin with performance. In the last 365 days, Fiverr stock has seen prices go up by 35.50% — while Upwork shares have surged by 31.18%.

In terms of analyst ratings, both of the stocks are consensus Buys. 

At present, 7 Wall Street equity researchers cover FVRR, which has 2 Strong Buy ratings, 3 Buy ratings, and 2 Hold ratings. Upwork stock is covered by 10 analysts, and has 2 Strong Buy ratings, 4 Buy ratings, and 4 Hold ratings.

The coverage is pretty comparable, so we have to turn to the analyst price targets to see which stock comes out on top. FVRR’s average 12-month price forecast implies a 25.4% upside, whereas UPWK’s average price target implies a 37.52% upside.

Alright — at this point, Upwork has a slight edge — but it’s not enough to make a definitive case for it. For that, we’ll have to go back to our rating system, and take a look at the 7 Component Grade ratings that make up each stock’s Zen Rating.

However, we do have to note that, even though both have a Zen Rating of A, the edge, once again, goes to UPWK — it ranks in the 96th percentile of stocks on the whole, whereas FVRR ranks in the 95th percentile.

Back to the Component Grade ratings. Fiverr ranks highly in terms of Growth (top 4%) and Value (top 7%). In contrast, Upwork ranks favorably when it comes to Value (top 6%), Financials (top 6%), Artificial Intelligence (top 10%), and Sentiment (top 12%).

To summarize — both companies are trading at attractive valuations. While Fiverr has the edge when it comes to Growth, Upwork ranks much better in terms of its balance sheet. UPWK also fares better in terms of Sentiment, which accounts for analyst ratings, price target changes, short interest, and insider selling.

Lastly, in terms of Artificial Intelligence, UPWK ranks more highly. This means that a neural network trained on more than two decades of fundamental and technical data gives the edge to Upwork.

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Speaking of Artificial Intelligence — incorporating AI features to provide superior results both to freelancers and employers is a significant part of both companies’ playbooks — and there’s something to be said for Upwork’s stronger financial position, particularly as the AI arms race keeps ramping up.

While personal preferences, the makeup of your portfolio, and your own goals do play a role here, it’s obvious that UPWK has more going for it.

Moreover, in the last 10 quarters, Fiverr has had one earnings miss — while Upwork has only delivered earnings beats. To boot, the rate of earnings per share (EPS) year-over-year (YoY) growth is much more impressive in the case of UPWK.

With everything said and done, I believe you should go with Upwork over Fiverr.

—> Click here to research FVRR and UPWK. If you’d like to find promising stocks in other sectors and industries, give our Stock Screener a spin.

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