In order to justify its price of $12 to $14 per share, Trainer wrote, the company would need to “obtain a dominant share of the freelancer market.”
“If competition slows its growth even slightly, the stock has significant downside,” Trainer said.
Trainer says that Fiverr, one of Upwork’s main competitors, receives better reviews from freelancers. This means that Upwork would have a very difficult time justifying its estimated price, let alone its current price.
In addition, Trainer says that Upwork’s expenses are growing faster than its revenue. In the first six months of 2018, revenue grew 28 percent, but its costs grew significantly more. The company is not profitable.
If Upwork is overvalued at $12 or $14 per share, $23 per share is certainly too high.
