Editor’s note: This column is part of InvestorPlace.com’s Best Stocks for 2021 contest. Louis Navellier’s pick for the contest is Fiverr International (NYSE:FVRR).
Fiverr International (NYSE:FVRR) is an Israel-based technology company that has nailed the gig economy’s demand for creative services work.
While the best known names in the gig economy space are probably Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT), this macrotrend was in place long before we ended up with our “side hustle” culture of people pulling down an annual income made up of various part-time gigs.
Before The Side Hustle
It used to be called freelancing. After the dotcom bubble burst, a lot of small- to mid-sized companies were interested in finding ways to leverage their core businesses while cutting expenses on talent they didn’t have to keep under their roof.
This transition started in newsrooms and the publishing world. It’s expensive to pay a staff of reporters and editors and designers and run print shops. Advertising — and demand — for paper-based products was drying up as the internet was moving readership to a digital platform.
But publishers didn’t have a viable online publishing model. And advertisers weren’t sure how to measure online advertising’s impact. As this dilemma continued, social media rose in popularity and mass media influence was under threat.
Newsroom budgets were slashed, and marketing departments as well. Papers and magazines went out of business or were absorbed by larger publishers with access to capital.
A New World For Creatives
This trend, of companies outsourcing major parts of operations to contracted professionals, has now become commonplace in most parts of the economy, both here and abroad. Boutique marketing agencies and copy shops are now the norm. For good or bad, this is the creative destruction of capitalism at work.
And FVRR has built a business identifying this trend and using to build an online platform that links creative talent with companies (and individuals) in need of creative talent.
Launched in 2009, FVRR opened at the best time and the worst time. As you may recall, 2009 was the rock bottom in the economy after the banking crisis slammed the global economy in 2008.
FVRR Is Built For Recession
But for FVRR, the global economic tumult was the perfect time to launch. Millions were losing jobs around the world and much of that was in creative talent sectors.
This helped establish FVRR among the professional community. Yet hiring wasn’t going to ramp up anytime soon. FVRR would have to wait and build out strategically. And the company has done just that.
Today, FVRR offers 400 categories of freelance work across 8 verticals, with more than 2.8 million customers buying services in over 160 countries. Just last month it offered new services in Mexico and Brazil. In Q3 of this year, Mexico’s freelance demand was up 109% year over year.
Pandemic Friendly
This last stat is powerful because it reinforces the fact that with all the economic uncertainty caused by the pandemic, this actually helps FVRR’s business model, since it has built a strong brand offering remote work talent.
FVRR stock is up 755% in the past 12 months and still sporting a market cap of $7 billion. That means there is plenty of growth left in existing markets as well as markets it has yet to move into.
And that market cap also makes it an attractive target for larger companies looking to diversify their product base.
Vaccines are on the way, and COVID-19 might be defeated sooner rather than later, but that doesn’t change how businesses are run. The current model is more likely to expand than contract and FVRR is in great shape to take full advantage of the new economic realities, whether that be work from home, side hustles or freelance.
Disclosure: On the date of publication, Louis Navellier has a long positions in FVRR in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.
