- After slowing down in the second half of 2019, Upwork reaccelerated its growth in Q1 2020. Marketplace revenue made up 90% of the business and grew by 24% YoY.
- Part of the growth plan is to invest more in brand awareness to bring in more higher-valued demand. So far, all the relevant metrics have been trending the right way.
- Currently led by its former CMO, it is likely the right timing to do so. Successful execution here can potentially upgrade Upwork from a 20% to 30% growth story.
There is upside potential on Upwork (UPWK). Since we wrote about the stock the first time last October, growth has accelerated while the take rate has improved. Furthermore, the increased investment in brand marketing will potentially result in higher growth beyond Q1 and 2020. However, shares price has also dropped by over 17% since then, primarily due to the concern on the COVID-19’s impact on the company’s significant SMB client base and the leadership change. Consequently, the current ~$12 price level offers an attractive entry point for investors.
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