The gig economy is here to stay. Temporary fee-for-service jobs given primarily to freelancers and independent contractors were growing in popularity before the Covid-19 pandemic.
But so-called “side hustles” only seemed to become more commonplace over the past year as people looked to supplement or replace lost income amid the economic downturn. Whether it is delivering food, renting out a home, selling crafts online or freelance writing, gig economy workers are multiplying in numbers.
The gig economy is forecast by Statista to be worth $455.2 billion by 2023, more than double the level it was at in 2018.
With that in mind, here are the four best gig economy stocks to buy for a post-pandemic world.
Let’s start with the most obvious post-pandemic gig economy stock, Airbnb. The online vacation rental marketplace that enables people to rent out their home to travelers is primed to take advantage of the economy reopening and the explosion in travel that is expected to begin in earnest this summer.
Airbnb was reporting a sharp rise in bookings at the end of 2020 as soon as vaccines against Covid-19 began to be approved by government regulators. The company reported that nights and experiences booked, which had sunk 72% in April 2020, had recovered by December.
Airbnb is working to capitalize on the economic turnaround, expanding into countries such as India, China and Latin America. Investors appear to like what they see. Shares of ABNB are up 34% year-to-date to near $200.
The stock has performed well since holding its initial public offering (IPO) last December, when its shares were priced at $68. And that’s despite Airbnb’s business being decimated by the global pandemic last year. As the economy reopens and people start travelling again, this stock could skyrocket higher.
A lot of investors made the mistake of lumping Etsy, an e-commerce website focused on handmade or vintage items and craft supplies, in with so called “stay-at-home stocks.”
While ETSY stock flourished during the pandemic as people sheltered at home, the company’s appeal is broad enough among hobbyists and enthusiasts of vintage items that it should continue its strong performance after Covid-19 is in our rearview mirror. Etsy inspired a loyal, almost cult-like following, among its legions of hobbyists and craft makers.
ETSY stock has continued to gallop this year, rising 32% year-to-date to $235. The company has been doing its best to diversify its offerings and keep its 4 million-plus customers engaged, adding jewelry, bags, clothing, home décor, furniture, toys, art, tools and various collectables to the items sold on its online platform.
With a focus on keeping commissions and fees low, Etsy is poised for growth.
After a rocky IPO and steep sell-off last March when the pandemic hit, Uber stock gradually recovered during the second half of 2020. It looks likely to climb higher this year as people feel comfortable leaving the confines of their home and taking rides again, whether it be for a night out at a restaurant or to commute into the office.
Since crashing at just $14.82 a share last March, UBER stock has rallied 266% and now trades at $54 a share.
Beyond the return of ridesharing, Uber has been diversifying its operations. In December, the company announced that it is selling its autonomous driving unit for $4 billion. Uber has also restructured its business lines into five segments that are called Mobility, Delivery, Freight, Advanced Technologies Group and All Other.
Uber is also pushing hard into the delivery space, moving beyond its core ridesharing business. Revenues from delivery rose more than 100% year-over-year in the company’s most recent quarter to $1.5 billion. Profitability is on the horizon.
Fiverr is another stock that is capable of thriving in a post-pandemic world. The Israeli company that provides an online marketplace for freelance services has been on fire over the past year as people looked for side hustles to supplement their incomes.
But Fiverr and its stock should continue to perform well as employment returns to pre-pandemic levels and the economy fires on all cylinders. Fiverr also benefits from being a global company that connects freelance and contract workers with employers all over planet Earth.
Last fall, Fiverr announced that it has expanded its international footprint to Latin America, with new offerings in Brazil and Mexico. By offering payment options and services in the native language spoken in individual countries, Fiverr is able to attract more people to its platform. Fiverr also launched this past September “Fiverr Business,” a subscription-based platform that helps corporate teams collaborate more efficiently with outside freelancers.
FVRR stock has responded to the changes positively. Since January 2020, Fiverr stock has risen from $22 a share to $287.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article.