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Upwork NASDAQ: UPWK is a expertise agency that operates as a web based market, connecting freelance employees and impartial contractors with employers. In 2024, the inventory worth is down 29% as a consequence of fears that AI will get rid of many freelance jobs. Now, most analysts protecting the inventory have a purchase score on it. Let’s take a look at Upwork’s enterprise strains and up to date monetary outcomes. We’ll additionally discover fears about AI hurting the freelance work mannequin and provides an outlook on the agency.

Detailing Upwork’s Enterprise Mannequin and Income Technology 


+0.16 (+1.51%)

(As of 06/28/2024 08:57 PM ET)

52-Week Vary


P/E Ratio

Value Goal

On its annual filing, Upwork calls itself “the world’s largest work market.” It measures this utilizing gross companies quantity (GSV). GSV represents the overall quantity these trying to rent (shoppers) spend on the agency’s choices, plus charges charged to these searching for work (expertise). The agency enabled $4.1 billion of GSV in 2023, 94% of which got here from the USA.

The first type of income era is by deducting a proportion of the expertise’s pay. The corporate normally deducts 10% from the contractor’s fee.

The corporate has two choices directed at shoppers: Market and Enterprise. Market provides shoppers entry to the location’s fundamental hiring options. Enterprise offers bigger shoppers with extra assets to assist scale their enterprise utilizing progress and cost-efficiency methods. They assign devoted billing, account administration, and enterprise analytics groups to shoppers to drive these methods.

Two different vital factors of notice: In Could 2023, Upwork fired 15% of its employees, principally in its gross sales division, and its major competitor is Fiverr NYSE: FVRR.

Upwork Q1 2024 Earnings: EPS and Income Beat, Shares Unstable Regardless of Robust Metrics

Upwork released its Q1 2024 earnings on Could 1, 2024. It beat on each earnings per share (EPS) and income.  EPS got here in at $0.13, two cents above estimates. Income got here in at $191 million, $5 million above estimates. The share worth surged, climbing by virtually 9% in a single day. But, optimism rapidly pale. By the following week, the achieve disappeared, and since that launch, shares have dropped by 11%. GSV grew 1%, and income grew 19% from the final yr.

Nonetheless, the agency’s “take price” is probably the most encouraging metric. The agency offers this tradition metric, which is outlined as the overall income divided by the overall GSV, with minor changes. The take price reveals the margin the agency brings in on the worth that its shoppers generate. The take price for Q1 was 18.9%, which elevated 2.9% from the earlier yr. This can be a giant growth within the firm’s margins, which could be very encouraging. The corporate additionally elevated the variety of lively shoppers on the platform from the earlier yr by 5%.

Upwork Ought to Overcome Gen-AI Headwinds

Seeing Upwork’s dramatic worth drop during the last yr is considerably puzzling. The share worth is up solely 6% from Aug. 2, 2023. The S&P 500 is up 22% over the identical interval. That is regardless of the agency truly turning into worthwhile since then, reporting optimistic earnings during the last three quarters. The inventory traded at a lot greater ranges in 2022 when its earnings had been detrimental. Shares are down 52% since July 4, 2023. This is because of considerations about generative AI’s impact on the corporate, which has pushed its shares down whereas driving the market up.

General MarketRank™
3.44 out of 5

Analyst Ranking
Reasonable Purchase

Upside/Draw back
65.6% Upside

Quick Curiosity

Dividend Power


Information Sentiment

Insider Buying and selling
Promoting Shares

Projected Earnings Progress

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Opinions about how AI will have an effect on the freelance work mannequin range. AI will minimize many roles that require low-skill and repetitive work. A latest examine confirmed that because the introduction of Open AI’s ChatGPT, job postings for “automation-prone” freelance work dropped 21%. This was significantly pronounced in writing, coding, and picture creation. Nonetheless, the remaining jobs required greater ability ranges and paid freelancers extra. Though many roles will probably be misplaced, different jobs with totally different ability units ought to substitute them.

Whereas considerations about Gen-AI are comprehensible, Upwork’s latest outcomes don’t lie. It doesn’t make sense for the agency to be buying and selling at over 50% lower than when it was severely unprofitable. The agency displaying its skill to extend its take price considerably and enhance lively shoppers within the face of Gen-AI headwinds makes this much more head-scratching. Analysts agree. The common worth goal of analysts protecting the agency that up to date their rankings since Q1 earnings is available in at $17.50, implying a 66% upside.

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