Here's Why Analysts Slashed Price Targets On Fiverr Post Q1

Analysts slashed their price targets on Fiverr International Ltd FVRR post Q1 results. JMP Securities analyst Andrew Boone maintained a Market Outperform and lowered the price target from $120 to $55.

Fiverr reported solid 1Q22 results, although with March revenue below trend by low-double digits in Europe and low-single digits in the U.S. and weakness continuing into April, 2Q revenue guidance was 6% below consensus while lowering 2022 revenue guidance by 6% at the midpoints. 

While Boone acknowledged concerns from the quarter like slowing active buyer growth and marketing efficiency normalizing, he continues to believe work from home, and a distributed workforce will be a sustained trend from the pandemic, supporting Boone's view of growing freelancer adoption. 

Boone views the recent slowdown in demand as more macro-driven. Revenue growth can reaccelerate to 20%+ in 2H22 and 2023 as comps ease and product initiatives like Fiverr's new browsing experience seller page and AI Audition help to improve conversion further and accelerate demand. 

RBC Capital analyst Brad Erickson maintained a Sector Perform and lowered the price target from $80 to $32. FVRR's Q1 was in line but saw incremental macro headwinds to its SMB customer base, which drove a lowered Q2 and FY22 outlook. 

FVRR is lapping tough COVID comps combined with the incremental war & macro headwinds. The rising marketing intensity in the outlook, along with SMB weakness through the seasonally slower summer months, suggests it's too early for Erickson to get more constructive with the rating for the time being. 

Needham analyst Bernie McTernan maintained a Buy and lowered the price target from $100 to $40. McTernan's re-rating followed lower target multiple and lower estimates following the lower FY'22E guidance driven by increased macro uncertainty impacting their primarily SMB customer base and continued product investments. 

McTernan was encouraged with the progress and product enhancements the company is making the Fiverr Business, but at this point, it's too small to add more excellent stability to results.

Price Action: FVRR shares traded higher by 7.73% at $32.74 on the last check Thursday.