The trends of the major indexes are up, nearly all institutional-quality leading growth stocks are still acting fine and many secondary indicators are also pointing higher, asserts Mike Cintolo, editor of Cabot Top Ten Trader.
Of course, 2020 has been all about staying flexible, and right now isn’t a time for complacency; it’s always possible the 11-week advance is going to lead to a sharper correction or consolidation. Thus, you should be open to any possibility, but right now, the evidence remains bullish, so we advise remaining heavily invested.
Meanwhile, Fiverr International (FVRR) is a unique story. The rise of the post-2008 “gig” economy gave birth to Fiverr, which allowed workers to earn a minimum of $5 for doing almost any task.
Its current platform connects businesses of all sizes with skilled freelancers offering digital services in more than 300 categories across eight verticals, including graphic design, video and writing.
Fiverr lists short-term gigs (much like eBay lists goods for sale) in a catalog that buyers can search and purchase from, with prices ranging anywhere from $5 to over $10,000.
Most of Fiverr’s customers are smaller firms with few employees that need a hand with something, but recent efforts have seen it expand to companies with up to 200 customers. It has 2.5 million active buyers as of Q1 (+17% from a year ago), with a spend per buyer of $177—an 18% increase.
Revenue is rapidly expanding, including a 42% increase in 2019, and featuring a 44% top line improvement in the latest quarter, with profitability expected by 2022. The pandemic-proof company guided for Q2 revenue in the $36 million range (+37%), and for 37% higher full-year sales—in line with analyst projections.
But the real attraction here is the long-term potential: The total U.S. market for digital freelance workers is estimated to be north of $750 billion a year, and Fiverr is currently focused on services that amount to around 17% of this total ($125 billion annually).
Given its innovative matching algorithms, international expansion and customer experience improvements, there’s every reason to expect years of rapid growth going forward.
FVRR came public last June and immediately slumped before picking up with the market later in the year. Interestingly, the stock hit a higher low during the March crash (20 vs 17 last September) and then went on a massive run, rising eight weeks in a row and pushing as high as $73 before finally pulling in.
Like most stocks, the current retreat could easily get deeper, but the weakness so far has been normal—you can enter here or on further dips if you want in.
