Citi has adjusted its price target for Upwork (UPWK, Financial) from $19 to $18, maintaining a Neutral stance on the company's stock. Despite this reduction, Upwork exceeded expectations with its first-quarter performance. Furthermore, the firm's revenue forecast for the second quarter aligns with analysts' predictions. While the company is pleased with the recent results, ongoing economic conditions continue to affect Upwork's market outlook. According to Citi, the current risk and reward associated with Upwork’s stock appears to be evenly poised.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 10 analysts, the average target price for Upwork Inc (UPWK, Financial) is $19.20 with a high estimate of $25.00 and a low estimate of $15.00. The average target implies an upside of 44.14% from the current price of $13.32. More detailed estimate data can be found on the Upwork Inc (UPWK) Forecast page.
Based on the consensus recommendation from 11 brokerage firms, Upwork Inc's (UPWK, Financial) average brokerage recommendation is currently 2.4, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Upwork Inc (UPWK, Financial) in one year is $14.01, suggesting a upside of 5.18% from the current price of $13.32. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Upwork Inc (UPWK) Summary page.
UPWK Key Business Developments
Release Date: May 05, 2025
- Revenue: $192.7 million, a record for the first quarter.
- Adjusted EBITDA: $56 million, with a margin of 29%.
- Gross Margin: 78.3%.
- GSV (Gross Services Volume): $988 million.
- Net Income: $37.7 million, a 105% increase over 2024.
- Free Cash Flow: $30.8 million.
- Cash and Cash Equivalents: Approximately $622 million at the end of the first quarter.
- Enterprise Revenue: $26.4 million, relatively flat year-over-year.
- Managed Services Revenue: $15.3 million, a 3% year-over-year growth.
- Marketplace Take Rate: 18.3% in Q1 2025, up from 17.7% in Q1 2024.
- Stock Buyback: $33.1 million used to buy back 2.3 million shares.
- Guidance for Q2 2025 Revenue: $184 million to $189 million.
- Guidance for Full Year 2025 Revenue: $740 million to $760 million.
- Guidance for Full Year 2025 Adjusted EBITDA: $190 million to $200 million.
- Non-GAAP Diluted EPS Guidance for 2025: Between $1.05 and $1.10.
- Stock-Based Compensation for 2025: Expected to be between $60 million and $65 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Upwork Inc (UPWK, Financial) reported a record first quarter revenue of $192.7 million, exceeding the high end of their guidance range.
- The company achieved a record high adjusted EBITDA of $56 million and an adjusted EBITDA margin of 29%.
- Upwork Inc (UPWK) is seeing strong growth in its Business Plus offering, with active clients more than doubling quarter over quarter.
- The company is making significant strides in AI, with 80,000 AI specialists on the platform and AI-related work commanding a 40% premium in freelancer earnings.
- Upwork Inc (UPWK) is well-positioned to lead the AI revolution with its investments in Uma, Upwork's Mindful AI, which is transforming customer experiences and driving platform engagement.
Negative Points
- Upwork Inc (UPWK) is experiencing some pressure on active client count due to top of funnel demand challenges.
- The macroeconomic environment remains turbulent, with slight macro headwinds impacting customer activity.
- Enterprise revenue was relatively flat year-over-year as the company shifted its sales focus.
- The company anticipates that Q1 will be the high water mark for margins in 2025 as they reinvest in growth opportunities.
- Despite strong performance, Upwork Inc (UPWK) is facing ongoing challenges in attracting new clients due to broader economic uncertainties.
