Fiverr Stock Downgraded by Oppenheimer, Goldman Sachs on Mounting AI Headwinds

Analysts at Oppenheimer and Goldman Sachs downgraded shares of Fiverr International on Thursday, citing intensifying competition from generative AI that prompted the freelance marketplace to significantly cut its full-year financial outlook.

Oppenheimer lowered its rating on Fiverr to Perform from Outperform, while Goldman Sachs cut the stock to Neutral from Buy. Goldman Sachs also slashed its 12-month price target on the shares to $13 from a previous target of $26.

Guidance Cut Amid Worsening Metrics

The dual downgrades followed Fiverr's decision to reduce its full-year revenue guidance by 9% and its adjusted EBITDA guidance by 21%. According to Oppenheimer analyst Jason Helfstein, pressure from the adoption of large language models "noticeably increase[d] intra-quarter," forcing the revised forecast.

The firm highlighted several concerning trends for the freelance platform:

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• Second-quarter revenue fell 10% year-over-year, a steeper decline than the 2% drop seen in the first quarter.
• The number of active buyers over the trailing twelve months fell by 22%.
• Lower-cost services, which constitute 85% of Fiverr's gross merchandise value, are facing the most significant headwinds.

A Tale of Two Freelance Economies

Goldman Sachs analyst Eric Sheridan pointed to "dueling themes" reshaping the freelance market. While AI is compressing demand for high-volume, lower-value tasks, it is also creating opportunities for higher-end, specialized projects that leverage AI tools.

This dynamic is reflected in Fiverr's user metrics. Even as the total number of active buyers fell 22%, the average spend per buyer grew by 16%. Still, both firms expressed caution, with Fiverr's management reportedly expecting a turnaround to take another six quarters. Oppenheimer noted it would wait for revenue stabilization before becoming more constructive, despite the stock trading near cash with an enterprise value of just $28 million.