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Upwork Inc. (UPWK) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Upwork (UPWK - Free Report) ? Shares have been on the move with the stock up 6.8% over the past month. The stock hit a new 52-week high of $16.36 in the previous session. Upwork has gained 2.4% since the start of the year compared to the 52% move for the Zacks Computer and Technology sector and the 60.3% return for the Zacks Internet - Services industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 7, 2023, Upwork reported EPS of $0.21 versus consensus estimate of $0.11.
For the current fiscal year, Upwork is expected to post earnings of $0.69 per share on $683.63 million in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $0.90 per share on $766.06 million in revenues. This represents a year-over-year change of 43.75% and 12.06%, respectively.
Valuation Metrics
Upwork may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Upwork has a Value Score of F. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 22.1X current fiscal year EPS estimates, which is not in-line with the peer industry average of 24.5X. On a trailing cash flow basis, the stock currently trades at 5X versus its peer group's average of 7.9X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Upwork currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Upwork passes the test. Thus, it seems as though Upwork shares could still be poised for more gains ahead.
How Does UPWK Stack Up to the Competition?
Shares of UPWK have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Crexendo Inc. (CXDO - Free Report) . CXDO has a Zacks Rank of # 2 (Buy) and a Value Score of D, a Growth Score of A, and a Momentum Score of D.
Earnings were strong last quarter. Crexendo Inc. beat our consensus estimate by 500%, and for the current fiscal year, CXDO is expected to post earnings of $0.21 per share on revenue of $52.79 million.
Shares of Crexendo Inc. have gained 56% over the past month, and currently trade at a forward P/E of 24.05X and a P/CF of 3.19X.
The Internet - Services industry is in the top 20% of all the industries we have in our universe, so it looks like there are some nice tailwinds for UPWK and CXDO, even beyond their own solid fundamental situation.
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Upwork Inc. (UPWK) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Upwork (UPWK - Free Report) ? Shares have been on the move with the stock up 6.8% over the past month. The stock hit a new 52-week high of $16.36 in the previous session. Upwork has gained 2.4% since the start of the year compared to the 52% move for the Zacks Computer and Technology sector and the 60.3% return for the Zacks Internet - Services industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 7, 2023, Upwork reported EPS of $0.21 versus consensus estimate of $0.11.
For the current fiscal year, Upwork is expected to post earnings of $0.69 per share on $683.63 million in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $0.90 per share on $766.06 million in revenues. This represents a year-over-year change of 43.75% and 12.06%, respectively.
Valuation Metrics
Upwork may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Upwork has a Value Score of F. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 22.1X current fiscal year EPS estimates, which is not in-line with the peer industry average of 24.5X. On a trailing cash flow basis, the stock currently trades at 5X versus its peer group's average of 7.9X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Upwork currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Upwork passes the test. Thus, it seems as though Upwork shares could still be poised for more gains ahead.
How Does UPWK Stack Up to the Competition?
Shares of UPWK have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Crexendo Inc. (CXDO - Free Report) . CXDO has a Zacks Rank of # 2 (Buy) and a Value Score of D, a Growth Score of A, and a Momentum Score of D.
Earnings were strong last quarter. Crexendo Inc. beat our consensus estimate by 500%, and for the current fiscal year, CXDO is expected to post earnings of $0.21 per share on revenue of $52.79 million.
Shares of Crexendo Inc. have gained 56% over the past month, and currently trade at a forward P/E of 24.05X and a P/CF of 3.19X.
The Internet - Services industry is in the top 20% of all the industries we have in our universe, so it looks like there are some nice tailwinds for UPWK and CXDO, even beyond their own solid fundamental situation.