Cash Rich, Low Price – Upwork Stock to Break Out?
We think Upwork (UPWK) stock is worth a look: It is growing, producing cash, and available at a significant valuation discount. Companies like this can use cash to fuel additional revenue growth, or simply pay their shareholders through dividends or buybacks. Either move makes them attractive to the market.
The stock is available at a significant discount to its 3-month, 1-year, and 2-year highs.
UPWK Has Strong Fundamentals
- Cash Yield: Upwork offers an impressive cash flow yield of 16.1%.
- Growing: Revenue growth of 2.4% over the last twelve months is not that great, but your cash pile is likely to grow.
- Valuation Discount: UPWK stock is currently trading at 44% below its 3-month high, 52% below its 1-year high, and 52% below its 2-year high.
Below is a quick comparison of UPWK fundamentals with S&P medians.
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| UPWK | S&P Median | |
|---|---|---|
| Sector | Industrials | – |
| Industry | Human Resource & Employment Services | – |
| Free Cash Flow Yield | 16.1% | 4.3% |
| Revenue Growth LTM | 2.4% | 7.3% |
| Operating Margin LTM | 16.4% | 18.4% |
| PS Ratio | 1.8 | 3.2 |
| PE Ratio | 12.0 | 23.7 |
| Discount vs 3-Month High | -44.0% | -8.4% |
| Discount vs 1-Year High | -52.0% | -12.4% |
| Discount vs 2-Year High | -52.0% | -14.4% |
*LTM: Last Twelve Months
But What About The Risk Involved?
While UPWK stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. Upwork took a hit of about 57% in 2018, dropped nearly 49% during the Covid pandemic, and plunged roughly 87% in the inflation shock. Even with all the positives around the company, these dips show how much risk is still baked in. Market turmoil doesn’t spare many, and Upwork’s history proves it can get hit hard when sentiment turns. But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, and outlook changes. Read UPWK Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
If you want to see more details, read Buy or Sell UPWK Stock.
Other Stocks Like UPWK
Not ready to act on UPWK? You could consider these alternatives:
These stocks have positive revenue growth, high free cash flow yield, and are trading at a meaningful discount to 3M, 1Y, and 2Y highs.
A portfolio that was built starting 12/31/2016 with stocks that fulfill the criteria above would have resulted in average 6-month and 12-month forward returns of 25.7% and 57.9% respectively, with win rate (percentage of picks returning positive) of above 70%.
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