The gig economy market has experienced a significant surge in recent years, propelled by the rapid advancement of technology and the shift towards digitalization in various industries. This transformation has created a demand for flexible, on-demand labor, allowing businesses to adapt quickly to changing market needs. As a result, investors are now looking at fundamentally stable gig economy stocks such as DoorDash, Inc. (DASH), Upwork Inc. (UPWK), and Fiverr International Ltd. (FVRR) as potential investment opportunities.
The gig economy is not just a passing trend but a revolution that is reshaping the way people work. Independent contractors and freelancers are now at the forefront of this dynamic ecosystem, filling temporary and part-time roles across a wide range of industries. From ride-hailing apps to food delivery services, the gig economy model has proven to be a driving force behind productivity and employment growth on a global scale.
In 2024, the gig economy market reached a staggering $556.7 billion, with projections indicating that it could reach $1.85 trillion by 2032. In the United States alone, more than 59 million individuals, accounting for 36% of the workforce, have embraced freelance work, challenging traditional job norms and reshaping the employment landscape.
Several factors have contributed to the exponential growth of the gig economy. The rise of delivery applications has connected gig workers with a vast number of opportunities for food and product deliveries, while the appeal of flexible working hours has attracted individuals looking to balance multiple responsibilities. Additionally, the increasing cost of living has pushed many to seek alternative sources of income beyond traditional 9-to-5 employment.
According to a report by Business Research Insights, the global gig economy market is expected to grow at a compound annual growth rate (CAGR) of 16.2%, reaching $1.85 trillion by 2032. This growth trajectory underscores the immense potential of the gig economy market and the opportunities it presents for investors.
Now, let’s delve into the fundamentals of three prominent gig economy stocks, starting with DoorDash, Inc. (DASH).
DoorDash, Inc. (DASH) operates a commerce platform that connects merchants, consumers, and independent contractors. The company’s DoorDash Marketplace and Wolt Marketplace offer a range of services, including customer acquisition, demand generation, order fulfillment, payment processing, and customer support. In a strategic move, DASH recently announced a collaboration with Walmart Canada to provide Canadians with on-demand access to grocery and general merchandise essentials, aiming to drive user growth and enhance convenience for customers.
In the fiscal third quarter of 2024, DASH reported a 25% year-over-year increase in revenue to $2.71 billion, with income from operations reaching $107 million compared to a loss in the previous year’s quarter. The company also saw a significant improvement in net income, reporting $162 million compared to a net loss in the prior year’s quarter. Analysts expect DASH’s revenue and earnings per share (EPS) for the fiscal fourth quarter of 2024 to increase by 23.3% and 122.4% year-over-year, respectively, reflecting strong growth prospects for the company.
Shares of DASH have surged by 58.8% over the past six months, indicating positive investor sentiment towards the stock. With a POWR Rating of B, DASH is considered a Buy in our proprietary rating system, with strong ratings for Growth and Sentiment. Within the Internet – Services industry, DASH is ranked #8 out of 24 stocks, highlighting its competitive position in the market.
Moving on to Upwork Inc. (UPWK), the company operates a work marketplace that connects businesses with independent professionals and agencies across various skill categories. In a recent development, UPWK enhanced its AI capabilities to improve business-freelancer collaboration and productivity, positioning itself as a leader in the AI revolution. The company also partnered with Beeline to streamline hiring processes and centralize contingent workforce management, offering enterprises an end-to-end solution for engaging highly skilled professionals.
In the fiscal third quarter of 2024, UPWK reported a 10.3% year-over-year increase in total revenue to $193.78 million, with non-GAAP income from operations rising by 35.6% from the prior year. The company’s non-GAAP net income and EPS also saw significant growth, reflecting strong financial performance. Analysts expect UPWK’s revenue and EPS for the fiscal year of 2024 to increase by 10.1% and 95.8% year-over-year, respectively, underscoring the company’s growth potential.
UPWK’s shares have surged by 59.8% over the past three months, indicating positive investor sentiment towards the stock. With a POWR Rating of B, UPWK is considered a Buy in our proprietary rating system, with strong ratings for Growth, Value, and Quality. Within the Internet – Services industry, UPWK is ranked #3 out of 24 stocks, highlighting its competitive position in the market.
Lastly, Fiverr International Ltd. (FVRR) operates an online marketplace that enables sellers to offer their services to buyers across various categories. The company recently released Dynamic Matching, a new AI-assisted matching tool that simplifies the hiring process for businesses and strengthens FVRR’s position as a leader in freelance marketplace innovation. In the fiscal third quarter of 2024, FVRR reported a 7.7% year-over-year increase in revenue to $99.63 million, with non-GAAP gross profit rising by 6.2% from the prior year. The company’s non-GAAP net income and EPS also saw significant growth, reflecting its strong financial performance.
Analysts expect FVRR’s revenue and EPS for the fiscal fourth quarter of 2024 to increase by 10.8% and 21.4% year-over-year, respectively, highlighting the company’s growth prospects. FVRR’s shares have surged by 30.8% over the past three months, indicating positive investor sentiment towards the stock. With a POWR Rating of B, FVRR is considered a Buy in our proprietary rating system, with strong ratings for Growth, Value, and Quality. Within the Internet industry, FVRR is ranked #9 out of 84 stocks, underscoring its competitive position in the market.
In conclusion, the gig economy market presents significant growth opportunities for investors, with companies like DoorDash, Inc. (DASH), Upwork Inc. (UPWK), and Fiverr International Ltd. (FVRR) well-positioned to capitalize on this trend. As the gig economy continues to reshape the employment landscape and drive productivity globally, these fundamentally stable stocks offer investors a chance to benefit from the sector’s growth potential.
