Fiverr International shares are an attractive entry point for investors following the recent pullback on artificial intelligence (AI) concerns, according to analysts at Oppenheimer.
The analysts awarded the stock an ‘Outperform’ rating and a price target of $55. Fiverr shares were trading at about $26.44 on Thursday.
With its shares down 23% since education platform Chegg warned of ChatGPT headwinds, the analysts evaluated AI’s potential impact on Fiverr.
They estimated that about 45% of Fiverr’s current service offerings could be disrupted by AI with 10% tailwinds from new services launched.
“Fiverr began to offer AI services in January, and we will likely see increased demand for highly competent AI artists/programmers over time,” they wrote.
They added that Fiverr’s total addressable market (TAM) is very large, even with AI disruption.
“We estimate TAM at $167 billion, growing to $308 billion by 2028E,” they wrote.
“Using Fiverr’s mix of categories, we estimate the largest TAM opportunity is in graphics/programming, representing 34%/16% of total TAM.
“Even if we removed the portion of each category we believe could be impacted by AI, Fiverr's 2028E TAM would still be about $170 billion.”
Contact the author at emily.jarvie@proactiveinvestors.com
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