The freelancer search site Upwork Inc. (UPWK) has risen more than 249 percent since the beginning of the year. During the COVID-19 pandemic and forced social isolation, the services provided by the company proved extremely successful. After the pandemic, however the move toward remote work and recruiting temporary workers is likely to continue. Therefore, Upwork’s favorable climate will continue.
The web platform of Upwork enables employers to find freelancers for one-time or long-term work including freelance programmers, designers, attorneys, accountants etc. The service is monetized at the cost of commission fees charged by the employer searching for an employee.
Despite the strong momentum that Upwork received during the pandemic, other long-term trends are also affecting its sector. Remote work started to gain prominence well before COVID-19, in particular. In the United States, about half of millennials have operated remotely in one way or another, according to 2019 results. It was a daily work or part-time job found on traditional job pages in many cases. Many big companies changed their attitude towards remote work after the pandemic, seeing it as a full-fledged source of employment. Some large corporations have already suggested that even after lifting of all social restrictions, they plan to leave remote work for some of their workers. For the Upwork network, this produces a favorable business climate.
Upwork posted revenue growth of 24 percent last quarter, to $96.7 million, which is higher than Wall Street analysts’ estimates. The non-GAAP earnings for the firm were $0.04 per share, while Wall Street anticipated a loss.
So far, investors are bullish about the prospects for Upwork as well as many other stocks based on remote services. The company’s shares are however, prone to uncertainty and can fluctuate depending on the labor market situation. In the fourth quarter, the company expects revenue to hit $97 million and full-year revenues to grow 21% year-on-year to $364 million.
Upwork Inc. (UPWK) stock was up 0.70% on Monday at $40.49 at ring of the bell.