Upwork Stock To $20?

Upwork (UPWK) stock has fallen 19% during the past day, and is currently trading at $15.21. Our multi-factor assessment suggests that it may be time to buy more shares of UPWK stock. We have, overall, a positive view of the stock, and a price of $20 may not be out of reach. We believe there are only a couple of things to fear in UPWK stock given its overall Moderate operating performance and financial condition. Considering stock’s Low valuation we think it is Attractive.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $2.0 Bil in market cap, Upwork provides a work marketplace connecting businesses with independent professionals and agencies across diverse skills like marketing, customer service, data science, design, and software development.

[1] Valuation Looks Low

This table highlights how UPWK is valued vs broader market. For more details see: UPWK Valuation Ratios

[2] Growth Is Weak

• Upwork has seen its top line grow at an average rate of 9.7% over the last 3 years
• Its revenues have grown 2.5% from $762 Mil to $781 Mil in the last 12 months
• Also, its quarterly revenues grew 4.1% to $202 Mil in the most recent quarter from $194 Mil a year ago.

This table highlights how UPWK is growing vs broader market. For more details see: UPWK Revenue Comparison

[3] Profitability Appears Strong

• UPWK last 12 month operating income was $115 Mil representing operating margin of 14.7%
• With cash flow margin of 28.6%, it generated nearly $223 Mil in operating cash flow over this period
• For the same period, UPWK generated nearly $247 Mil in net income, suggesting net margin of about 31.6%

This table highlights how UPWK profitability vs broader market. For more details see: UPWK Operating Income Comparison

[4] Financial Stability Looks Very Strong

• UPWK Debt was $371 Mil at the end of the most recent quarter, while its current Market Cap is $2.0 Bil. This implies Debt-to-Equity Ratio of 18.5%
• UPWK Cash (including cash equivalents) makes up $643 Mil of $1.3 Bil in total Assets. This yields a Cash-to-Assets Ratio of 49.0%

[5] Downturn Resilience Is Weak

UPWK has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• UPWK stock fell 87.5% from a high of $60.70 on 13 July 2021 to $7.60 on 25 May 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $22.11 on 25 January 2026 , and currently trades at $15.21

 
2020 Covid Pandemic

• UPWK stock fell 49.4% from a high of $10.67 on 1 January 2020 to $5.40 on 3 April 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 12 May 2020

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read UPWK Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.