On Thursday, Fiverr’s stock price (ticker: FVRR) fell sharply, closing down nearly 18%. The drop came as a result of the company’s guidance for the second quarter and full year of 2020, which disappointed investors.
Fiverr is a platform that connects freelancers with businesses that need their services. The company was founded in 2010 and went public in 2019.
In its guidance, Fiverr said that it expects second-quarter revenue to be in the range of $68 million to $70 million. This is below the $73.7 million that analysts were expecting.
For the full year, Fiverr expects to generate revenue of $297 million to $305 million. This is also below the $309 million that analysts were expecting.
The company attributed the lower-than-expected guidance to the coronavirus pandemic, which has led to a slowdown in business activity around the world.
“The outbreak of COVID-19 is causing significant macroeconomic uncertainty and disruption,” said Fiverr CEO Micha Kaufman. “As a result, we are seeing softer demand for our services.”
Kaufman said that Fiverr is taking steps to cut costs and preserve cash in order to weather the current downturn. These steps include reducing headcount and marketing spending.
Despite the challenges posed by the pandemic, Kaufman said that he remains “optimistic about Fiverr’s long-term prospects.”
“We believe that when businesses start to resume normal operations, they will need our platform more than ever to help them quickly adapt and pivot their workforces,” he said.
The stock market reacted negatively to Fiverr’s guidance, sending the shares sharply lower. This is likely due to concerns about the company’s near-term prospects in light of the pandemic. However, long-term investors may want to consider buying shares on Thursday’s dip.
Why Did Fiverr Stock Fall?
Fiverr stock fell on Thursday after the company released its guidance for the second quarter and full year of 2020. The guidance disappointed investors, who are concerned about the company’s near-term prospects in light of the coronavirus pandemic.
Conclusion
Fiverr stock fell on Thursday after releasing disappointing guidance for Q2 and FY 2020 due to coronavirus concerns. While this presents a short-term challenge for the company, it may present a long-term opportunity for investors.
