Q2 Earnings Review: Gig Economy’s Best and Worst Performers

As the Q2 earnings season wraps up, it’s time to evaluate the standout performers and those that fell short in the gig economy sector. This quarter saw significant developments among key players, including Angi (NASDAQ: ANGI) and its competitors, as they navigated a landscape shaped by technological advancements and changing consumer behaviors.

The Rise of the Gig Economy

The gig economy has transformed the way we work and access services, largely fueled by the advent of smartphones and the “always-on” internet. Much like the iPhone revolutionized communication, the gig economy has made it possible for individuals to find freelance work and on-demand services at the tap of a finger. From ride-hailing to food delivery, and even home repairs, the proliferation of tech-enabled platforms has created a marketplace where services are just a few clicks away.

Q2 Performance Overview

The six gig economy stocks we monitor reported a satisfactory Q2, collectively beating analysts’ revenue estimates by 2.5%. However, guidance for the next quarter fell slightly short, coming in at 0.5% below expectations. Despite this, the overall performance of gig economy stocks has been encouraging, with share prices rising an average of 13.4% since the earnings announcements.

Angi (NASDAQ: ANGI)

Angi, formed through the merger of Angie’s List and HomeAdvisor, operates the largest online marketplace for home services in the U.S. In Q2, Angi reported revenues of $278.2 million, marking an 11.7% decline year-on-year. Despite this drop, the results exceeded analysts’ expectations by 6.5%. The company also reported 4.56 million service requests, down 7.6% year-on-year, but still managed to beat analysts’ service request and EBITDA estimates.

Angi’s stock has seen a notable increase of 14.9% since the earnings report, currently trading at $18. However, with the slowest revenue growth among its peers, investors are left wondering: Is now the time to buy Angi?

Upwork (NASDAQ: UPWK)

Upwork, a platform connecting businesses with independent professionals, reported revenues of $194.9 million, remaining flat year-on-year but surpassing analysts’ expectations by 3.9%. The company raised its full-year EBITDA guidance, showcasing a strong quarter despite a decline in active customers, which fell by 8.3% to 796,000.

The market reacted positively, with Upwork’s stock soaring 34.1% since the earnings announcement, currently trading at $16.10. Investors may be asking: Is now the time to buy Upwork?

Fiverr (NYSE: FVRR)

Fiverr operates a global freelance marketplace for digital services and reported revenues of $108.6 million, up 14.8% year-on-year. However, the company faced challenges, including a decline in active buyers, which fell by 10.9% to 3.43 million. This led to the weakest full-year guidance update among its peers, resulting in a 4.6% drop in stock price since the earnings report, currently trading at $23.85.

DoorDash (NYSE: DASH)

DoorDash, known for its on-demand food delivery services, reported impressive revenues of $3.28 billion, up 24.9% year-on-year, exceeding analysts’ expectations by 3.8%. The company also logged 761 million service requests, a 19.8% increase year-on-year, showcasing the fastest revenue growth among its peers. However, the stock has remained flat since the earnings report, currently trading at $256.45.

Uber (NYSE: UBER)

Uber, a giant in the on-demand services space, reported revenues of $12.65 billion, reflecting an 18.2% year-on-year increase and beating analysts’ expectations by 1.4%. The company also reported a significant growth in users, reaching 180 million, up 15.4% year-on-year. Since the earnings report, Uber’s stock has risen by 6.2%, currently trading at $95.

Economic Context

The economic landscape has been influenced by the Federal Reserve’s rate hikes in 2022 and 2023, which have successfully brought inflation down from its post-pandemic highs. The economy has shown resilience, avoiding a recession despite these challenges. Recent rate cuts have further bolstered market performance, leading to strong stock returns in 2024. However, uncertainties remain regarding the health of the economy and potential impacts from tariffs and corporate tax cuts.

Conclusion

As we assess the Q2 earnings results, it’s clear that while some companies in the gig economy are thriving, others are facing significant challenges. Investors looking to capitalize on growth opportunities should consider the fundamentals of each company and the broader economic context. For those interested in identifying potential winners, exploring hidden gem stocks could provide valuable insights into companies poised for growth, regardless of the political or macroeconomic climate.

For more detailed analyses and insights into these companies, check out our comprehensive reports linked throughout this article.