Fiverr has been treading water for the past six months, recording a small loss of 3% while holding steady at $24.48. The stock also fell short of the S&P 500’s 22.7% gain during that period.
Is now the time to buy FVRR? Find out in our full research report, it’s free for active Edge members.
Why Does FVRR Stock Spark Debate?
Based in Tel Aviv, Fiverr (NYSE: FVRR) operates a fixed price global freelance marketplace for digital services.
Two Things to Like:
1. Eye-Popping Growth in Customer Spending
Average revenue per buyer (ARPB) is a critical metric to track because it measures how much the company earns in transaction fees from each buyer. This number also informs us about Fiverr’s take rate, which represents its pricing leverage over the ecosystem, or "cut" from each transaction.
Fiverr’s ARPB growth has been exceptional over the last two years, averaging 20.5%. Although its active buyers shrank during this time, the company’s ability to successfully increase monetization demonstrates its platform’s value for existing buyers. 
2. Increasing Free Cash Flow Margin Juices Financials
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
As you can see below, Fiverr’s margin expanded by 13 percentage points over the last few years. This is encouraging, and we can see it became a less capital-intensive business because its free cash flow profitability rose more than its operating profitability. Fiverr’s free cash flow margin for the trailing 12 months was 22.1%.
One Reason to be Careful:
Declining Active Buyers Reflect Product Weakness
As a gig economy marketplace, Fiverr generates revenue growth by expanding the number of services on its platform (e.g. rides, deliveries, freelance jobs) and raising the commission fee from each service provided.
Fiverr struggled with new customer acquisition over the last two years as its active buyers have declined by 8.1% annually to 3.43 million in the latest quarter. This performance isn't ideal because internet usage is secular, meaning there are typically unaddressed market opportunities. If Fiverr wants to accelerate growth, it likely needs to enhance the appeal of its current offerings or innovate with new products. 
Final Judgment
Fiverr’s merits more than compensate for its flaws. With its shares trailing the market in recent months, the stock trades at 9.4× forward EV/EBITDA (or $24.48 per share). Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
Stocks We Like Even More Than Fiverr
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