We came across a bullish thesis on Upwork Inc. (NASDAQ:UPWK) on Make Money, Make Time’s Substack by Oliver | MMMT Wealth. In this article, we will summarize the bulls’ thesis on UPWK. Upwork Inc. (NASDAQ:UPWK)’s share was trading at $16.74 as of Dec 24th. UPWK’s trailing and forward P/E were 27 and 13.74 respectively according to Yahoo Finance.
A freelancer typing at a laptop, coffee in hand, at an outdoor cafe with a view of the city skyline.
Upwork (NASDAQ:UPWK) operates a global freelancing platform that streamlines the process of hiring, project management, and payment for businesses and independent professionals. With the gig economy continuing to expand, UPWK is well-positioned to benefit from this structural shift in the labor market. The company reported 14.54% revenue growth, underpinned by its strong gross profit margin of 77.29%, highlighting the scalability of its platform. Despite a modest EV/Sales valuation of 2.7x and an EV/EBITDA of 11.6x on a next-twelve-month basis, UPWK’s financial performance is improving significantly.
In Q3, the company posted record net income and a 193% surge in free cash flow (FCF), reaching $0.55 per share (LTM), driven by a favorable one-off billing schedule and cost-reduction initiatives, including last year’s workforce cuts, which are now delivering results. To further strengthen its recurring revenue streams, UPWK recently launched the Business Plus membership, aiming to attract more consistent client spending.
These developments underscore UPWK’s potential for sustainable growth and margin expansion. With its competitive position in a growing market and disciplined cost management, UPWK offers a compelling investment case, trading at attractive valuations with clear catalysts for further upside.
Upwork Inc. (NASDAQ:UPWK) is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held UPWK at the end of the third quarter which was 28 in the previous quarter. While we acknowledge the risk and potential of UPWK as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than UPWK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.