Fiverr (FVRR) Tests Support Despite Price Target Boost

Fiverr International Ltd. (FVRR) shares fell more than 6% during Thursday's session despite bullish comments from Needham.

Key Takeaways

  • Fiverr shares moved lower during Thursday's session despite bullish comments from Needham, which raised its price target to $180.00 per share.
  • Analyst Brad Erickson believes that the company is well positioned to benefit from the post-COVID era with strong new buyer growth and many sources of upside potential.
  • The stock remains in an intermediate-term downtrend dating back to Oct. 21, but the bullish analyst comments could turn things around.

Needham analyst Brad Erickson raised his price target to $180.00 per share, saying that Fiverr continues to demonstrate its dominance in defining the new way that work is getting done in the post-COVID era. New buyer growth is accelerating, new cohorts are exhibiting positive trends for spend, and the company has multiple sources of upside potential.

The move comes shortly after Fiverr reported third quarter revenue that rose 87.8% to $52.35 million, beating consensus estimates by $3.49 million, and non-GAAP earnings of 12 cents per share, beating consensus estimates by six cents per share. Management anticipates revenue of $186 million to $187 million for the fiscal year 2020.

A consensus estimate is a forecast of a public company's projected earnings based on the combined estimates of all equity analysts that cover the stock.

From a technical standpoint, the stock continued its period of consolidation following the third quarter financial results. The relative strength index (RSI) remains neutral with a reading of 47.42, but the moving average convergence divergence (MACD) remains in a bearish downtrend dating back to Oct. 21 when the stock turned lower.

Traders should watch for consolidation above Fibonacci and 200-day moving average support levels at $139.68. If the stock rebounds higher, traders could see a retest of highs of almost $185.00. If the stock breaks down, traders could see a move to test trendline support at around $140.00 or Fibonacci support at $123.07.

The Bottom Line

Fiverr shares moved lower during Thursday's session despite Needham raising its price target to $180.00 per share. In addition to strong third quarter financial results, the analyst believes that the company is well positioned to benefit from the new way that work will be done in the post-COVID era. The stock remains in an intermediate-term downtrend but could see a turnaround from the favorable analyst comments.

The author holds no position in the stock(s) mentioned except through passively managed index funds.

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