Upwork Inc's Meteoric Rise: Unpacking the 89% Surge in Just 3 Months

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Upwork Inc (UPWK, Financial), a leading player in the Business Services industry, has seen a significant surge in its stock price over the past three months. With a market cap of $2.01 billion and a current price of $14.92, the company's stock has experienced an impressive 89.05% increase from its price of $9.55 three months ago. However, the past week has seen a slight dip of 6.14%. The GF Value, defined by GuruFocus.com, calculates a stock's intrinsic value using historical multiples, past performance adjustments, and future business estimates. Currently, the GF Value of Upwork Inc stands at $28.07, indicating that the stock is significantly undervalued. This is a shift from three months ago when the GF Value was $28.01, suggesting a possible value trap.

Company Overview

Upwork Inc is a United States-based company that operates an online marketplace that enables businesses to find and work with highly-skilled independent professionals. The company develops a platform for hiring and freelancing purposes. Its product offerings include Upwork Basic, Upwork Plus, Upwork Business, Upwork Enterprise, and Upwork Payroll. The business generates revenue from Talent and Clients across the USA, India, the Philippines, and the rest of the world. Substantial income is derived from providing services to Clients. 1696904507172061184.png

Profitability Analysis

Upwork Inc's Profitability Rank stands at 3/10, indicating a relatively low level of profitability compared to other companies in the industry. The company's Operating Margin is -11.87%, which is better than 13.54% of the companies in the industry. The ROE and ROA are -10.55% and -2.76% respectively, outperforming 12.85% and 20.17% of the companies in the industry. However, the ROIC of -43.42% is only better than 5.31% of the companies in the industry. 1696904532862173184.png

Growth Prospects

Upwork Inc's Growth Rank is 5/10, indicating moderate growth prospects. The company's 3-Year Revenue Growth Rate per Share is 20.10%, outperforming 84.61% of the companies in the industry. The 5-Year Revenue Growth Rate per Share is 10.80%, better than 74.62% of the companies in the industry. The Total Revenue Growth Rate (Future 3Y To 5Y Est) is 13.70%, outperforming 81.93% of the companies in the industry. However, the 3-Year and 5-Year EPS without NRI Growth Rates are -66.30% and -53.10% respectively, only better than 2.84% and 0.61% of the companies in the industry. 1696904551149338624.png

Major Stock Holders

Upwork Inc's stock is held by several prominent investors. Baillie Gifford (Trades, Portfolio) holds the largest share with 6,565,230 shares, accounting for 4.92% of the total shares. Jim Simons (Trades, Portfolio) holds 2,465,182 shares, representing 1.83% of the total shares. First Pacific Advisors (Trades, Portfolio) holds 161,357 shares, accounting for 0.12% of the total shares.

Competitive Landscape

Upwork Inc operates in a competitive industry with several key players. ZipRecruiter Inc (ZIP, Financial) has a stock market cap of $1.65 billion, Kforce Inc (KFRC, Financial) has a market cap of $1.27 billion, and Korn Ferry (KFY, Financial) has a market cap of $2.79 billion.

Conclusion

In conclusion, Upwork Inc has shown impressive growth in its stock price over the past three months, despite a slight dip in the past week. The company's GF Value indicates that the stock is significantly undervalued, presenting potential opportunities for investors. However, the company's profitability and growth ranks suggest room for improvement. With major investors holding significant shares and a competitive landscape, Upwork Inc's future performance will be interesting to watch.

Disclosures

I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.