The gig economy stocks are thriving even as we emerge from the global pandemic. With people all over the world quitting their jobs in record numbers, many are relying on freelance work to either replace or supplement their income.
And trends indicate that so called “side hustles” are growing in popularity among a fractious and disrupted workforce.
If anything, the pandemic provided people with time to reflect on work and careers and reevaluate their priorities. Increasingly, people seem to favor being their own boss, setting their own hours, and earning money on their own terms, which is what the gig economy is all about.
This, of course, is good news for companies that drive the gig economy forward. Here is a list of the three hottest gig economy stocks to buy heading into year-end.
Hot Gig Economy Stocks to Buy: Fiverr (FVRR)
With its share price nearly 50% off its 52-week high, freelance service provider Fiverr’s stock is a screaming buy right now. Since peaking at $336 a share in February this year, FVRR stock has declined 47% to now trade at $178.
The decline has been due to Fiverr being lumped in with other pandemic stocks and the view that demand for its online marketplace for freelancers to offer their services to customers around the world will dwindle as the economy reopens and people return to past work habits.
However, the company’s financial data indicates that this view is a misconception.
The Tel Aviv-based company just reported stellar earnings in mid-November that showed its revenue for the quarter was $73.3 million, a 42% year over year increase. The third quarter results also showed that the company’s active buyers now total more than four million and the average spend per buyer is up 20% to $234.
Fiverr’s earnings report beat analyst expectations and the company’s own guidance across the board. Fiverr also recently completed acquisitions of Stoke Talent and CreativeLive, and launched Fiverr Workspace that is aimed at improving the experience of freelancers on its platform.
The median price target on FVRR stock is currently $213 a share, which would represent a 20% increase from where the shares are currently trading.
Airbnb (ABNB)
Airbnb looks to be back after enduring a steep downturn during the global pandemic. Following its blockbuster initial public offering (IPO) last December, ABNB stock languished during the spring with its share price falling as low as $121.50. However, the stock has gained 56% during the last six months to now trade at $206.52.
Analysts seem confident that the stock can retest and even surpass its all-time high of $220 a share in coming months. The rebound has largely been due to strong bookings of Airbnb’s homestays and accommodations. Airbnb reported 79.7 million nights and experiences booked in the third quarter, a 29% year over year increase.
Also, Airbnb reported that in the third quarter, profits grew at an annualized rate of 280% and the company earned its highest revenue and net income on record. The company’s Q3 adjusted EBITDA came in at $1.1 billion, up from 37% last year and 19% in 2019.
Airbnb had $1.8 billion of cash on hand at the end of its most recent quarter. Those kind of numbers are the reason why ABNB stock has been jumping in recent months. And the company sees bright days ahead as pandemic restrictions continue to be eased around the world and international travel gains momentum.
Hot Gig Economy Stocks to Buy: Uber (UBER)
Shares of ride hailing and food delivery company Uber have chronically underperformed since the company held its IPO in the spring of 2019. However, there is reason to believe that better days are ahead for the San Francisco-based company.
Bank of America (NYSE:BAC) recently slapped a “buy” rating on UBER stock after the company reported its first profitable quarter ever. Uber’s third quarter results showed an operating profit of $8 million, which surprised markets.
Uber also announced a 57% annual increase in its gross bookings, as well as a 39% increase in trips taken during the third quarter. The company’s $8 million profit was up from a massive $507 million loss a year ago during the depths of the pandemic.
Looking ahead, Uber has announced that it has restarted its “shared rides,” where strangers share a car ride together, under a new banner called “UberX Share.” Ride sharing among strangers had been halted during the height of Covid-19. News that ridesharing is starting again was enough to vault UBER stock 5% higher.
The company’s share price has climbed a total 3% in the past week of trading and now changes hands at about $45 per share. While Uber stock is still down 13% year-to-date, there is reason to believe that the company has turned a corner and that its business is back on track as the pandemic slides into the rearview mirror.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
