Upwork (NASDAQ:UPWK), which specializes in connecting freelancers to employers, surged 11% in yesterday's trading amid a little better than double normal volume and has kept that momentum going into this morning's session as well. The company is seeing substantial gains by leading the way in making those vital connections, a point that is not lost on the financial analyst community, which is encouraging investors to buy in. The CEO, however, is not taking that advice himself.
A Changing Workforce Calls for Upwork
Yesterday's surge in Upwork came at about the same time that Investor's Business Daily declared it to be the publication's “Stock of the Day.” IBD noted that the company's focus on connecting freelancers with the businesses that would use freelance labor is increasingly tailor-made for our current economic environment, making it a top pick for potential investors.
Upwork's CEO Hayden Brown noted that companies are less afraid to engage with remote talent following the pandemic. Though demand was increasing before the pandemic, Brown noted, it was the pandemic that really kicked demand upward. Given that, in many cases, remote work was the only way anything could get done during the early days of the pandemic, that's not surprising.
IBD's rating, meanwhile, came about as a result of several factors, including its underlying fundamentals; the company rated a 94 out of 99 on the publication's Stock Checkup tool, and also boasted a Relative Strength rating of 96. That suggests the stock is doing well against others in the sector.
Further supporting this notion was Upwork's earnings report, turned in about seven weeks ago. The company revealed that revenue had increased 37% from the year prior, reaching $113.6 million total. This growth wasn't an isolated event, but rather part of a growing trend; the May 4 results represented the third consecutive quarter of revenue growth, which has been growing at that same double-digit trend for some time now. Earnings came in at a positive $0.03 per share against an expected loss of $0.03, and Upwork was expecting revenue for the full fiscal year to come in between $480 million and $490 million overall.
What Are Financial Analysts Saying About Upwork Stock?
Those looking for more detail about the Upwork stock forecast need only look to the larger financial analyst community. Our latest research on that front considers Upwork worth buying in on, as Upwork stock has had a consensus rating of “buy” for the last two years now.
A year ago, Upwork stock had four “buy” ratings and two “hold” to its credit. Six months ago, that improved to six “buy” and two “hold”. Today, we have six “buy” and one “hold”, which shows the projections have only gotten more bullish over the course of the last year.
The Upwork price target holds to a fairly close range; the current consensus price target is $60.75, with a high of $77 and a low of $39. Given that Upwork stock currently trades at $54.67, there's upside potential left to be had here.
Recent developments for Upwork have been few in number but generally positive. In May, BTIG Research maintained its “buy” rating on the company but lowered its price target from $75 to $65. Back in February, four different analysts—Citigroup, MKM Partners, Stifel Nicolaus and JMP Securities—all raised their price targets on the company. Most did so incrementally, but JMP Securities nearly tripled its target, going from $28 to $77 per share.
It's also worth noting that less-formal Upwork stock analysis is taking place based on options activity and inside selling. Traders bought 9,386 call options on the company on Tuesday, a massive increase given that normal call option volume is 1,042. While investors and analysts alike are heralding the future of Upwork, that's not the case for the CEO, who recently sold a substantial portion of his holdings. Back on Friday, June 18, Hayden Brown sold 30,524 shares of stock for a total transaction value of $1,462,099.60. Brown has been selling off shares well before this, having sold 4,083 shares yesterday, along with 1,310 shares on May 18. He also sold 20,000 shares back on May 13 and another 1,418 shares on April 19. Brown still has a substantial portion of his holdings left, with 673,855 shares still available.
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