重申对 FVRR 的买入评级，但因 AI 威胁将信心下调至低，若管理层近期无进展，未来可能下调评级。

Fiverr is a gig economy platform which sees its business under threat due to the rising effectiveness of artificial intelligence. For the last couple of quarters, I've begun to see evidence that the company's business is experiencing that negative impact.

So, it's no longer a risk of potential negative outcomes in the future. It's happening today.

The company in its most recently reported quarter reported revenue of 97.8 8 million, which is down 10% year-over-year. Marketplace revenue was down even more at 15.5%.

So, we're seeing the impacts negatively to Fiverr's business. Today, the company or over the weekend, the company did experience some positive news. And today the stock price increased as a result of leaders of these large language models trying to form a coalition to voluntarily decrease the pace of AI investment that could slow the transition and give Fiverr more time to adjust to these changing business dynamics.

So given these headwinds, is it time to dump Fiverr stock or is it still a buying opportunity? For years, this business had been growing robustly. It was benefiting from tailwinds with increasing adoption from both sides of the equation.

It brings together freelancers that want to perform work and people that want to hire freelancers for work. It's a more convenient transaction than hiring somebody full-time. And also, there are many projects that don't require a full-time commitment, but just a partial commitment to complete a project.

That's allowed Fiverr to increase its revenue from around 100 million in 2020 all the way up to a peak of about 425 million. But that started to turn negative. Over the previous couple of quarters, Fiverr's revenue growth has turned downward, an inflection point negative. two consecutive quarters now of negative year-over-year revenue. 418 million over the trailing 12-month period. It's down from higher levels earlier.

And given what the management team is forecasting, it's likely that the company's revenue is likely to continue downward.

The management team is completing a reorientation, a restructuring, a repositioning of the business. But they also cautioned investors that this turnaround will take at least six quarters or at least a year and a half to start to see the benefits.

Now with the improving revenue, Fiverr's operating profit margin was also improving dramatically. It's one of the things I liked about the business. Not only was revenue growing nicely, but its operating profitability was also increasing.

It operates on that lucrative platform business model where it brings together two sides of a transaction and takes a fee on every transaction. I liked all the characteristics of the business.

The AI risk was the most notable negative downside.

Fiverr's operating margin still increased to 4.2% over the trailing 12-month period. That's up from around -20% in 2023.

The returns on invested capital were also improving nicely given that the company doesn't need to invest in the platform all that much. Right? It's a asset-like business model bringing together two sides of a transaction.

It's returns on invested capital improved all the way up to 5% over the trailing 12-month period.

The valuation has collapsed. It's trading at the cheapest level this business has traded for in its history or close to it. and it deserves to be trading at near its cheapest valuation in history because it's under the most significant threat that it's faced in its existence.

The pandemic was actually a positive for the business. So that wasn't the big risk. It was actually an upside as more people wanted to work from home. There was more opportunity for the business during that time period.

Its forward price to earnings now is just seven. And if you look at the actual market price, it's down below $10 per share. Year to date, it's down over 53%.

And of course, I'm disappointed in that because I've ranked Fiverr stock as a buying opportunity. And not just once. I've made multiple videos following Fiverr stock over previous years, suggesting that the valuation was already incorporating a lot of the downside into the business.

And so it still looked like an buying opportunity despite the negative headwinds from artificial intelligence.

So today I also revised my discounted cash flow valuation, revising the numbers lower, significantly lower in the estimated free cash flow I expect this business will generate between now and the very long run.

This business generated roughly $92 million in free cash flow in 2025. And I'm forecasting that drops all the way to 30 million by 2027. So I'm estimating that more than 2/3 of this company's cash flow will decrease.

That's the large impact I'm estimating into Fiverr's business as a result of people shifting their purchasing and looking to AI to automate process rather than hire gig economy workers to complete some of these smaller projects.

Even despite those revisions lower, the company's intrinsic value at $12.40 remains above the market price of $9.28, leaving an upside of about 34% from its current market price.

I mentioned that I have had the stock ranked as a buying opportunity, one of my worst rankings of all of the rankings I've made over the past few years. I also highlighted that I had a medium conviction on this ranking and I last updated it on July 2nd.

Today I'll be reiterating the buy rating, but I am losing confidence in the business. I'm decreasing my confidence level, my conviction level to low and unless the management shows me something over the next couple of quarters, I wouldn't be surprised if I downgrade this stock further still.

It's been a disappointment and through no fault of its own, it was caught offguard with the rising effectiveness of artificial intelligence which it may not be able to defend itself against.