The gig economy has grown exponentially in the past few years, driven by the digital revolution, changing workforce preferences, and a strong need for flexible and cost-effective employment solutions.
Given the industry’s tailwinds, investors could consider buying fundamentally sound gig economy stocks, PayPal Holdings, Inc. (PYPL), eBay Inc. (EBAY), and Fiverr International Ltd. (FVRR), which are thriving in a post-pandemic world.
The gig economy is a relatively new term for businesses and individuals participating in short-term, project-based work instead of conventional full-time jobs. According to the International Federation of Accountants, the economic impact of the gig economy will result in gig workers outnumbering traditional workers by 2027.
Post-pandemic, more than 16% of global organizations have embraced new work platforms, allowing freelance workers to secure gig engagements successfully. The American workforce is one of the biggest benefactors of the gig economy, with Generation Z being the most willing to embrace these changes.
Considering these encouraging trends, let’s take a look at the fundamentals of the three best gig economy stocks.
PayPal Holdings, Inc. (PYPL)
PYPL operates a technology platform that enables digital payments on behalf of merchants and consumers worldwide. It operates a two-sided network at scale that connects merchants and consumers, and enables its customers to connect, transact, and send and receive payments online and in person, as well as transfer and withdraw funds using various funding sources.
On August 6, 2024, PYPL announced that Fastlane by PYPL was available for U.S. businesses of all sizes, helping to increase their sales and drive customer loyalty in time for the upcoming holiday shopping season.
PYPL’s trailing-12-month levered FCF margin of 20.65% is 13.9% higher than the industry average of 18.13%. Also, the stock’s trailing-12-month ROCE and ROTC of 22.03% and 10.32% are favorably compared to the industry averages of 10.26% and 6.90%, respectively.
For the second quarter that ended June 30, 2024, PYPL’s net revenues increased 8% year-over-year to $7.89 billion. Its non-GAAP net income and non-GAAP earnings per share came in at $1.24 billion and $1.19, respectively. In addition, as of June 30, 2024, the company’s total assets stood at $84.02 billion, compared to $82.17 billion as of December 31, 2023.
Analysts expect PYPL’s revenue for the third quarter ending September 2024 to increase 6.2% year-over-year to $7.88 billion. Street expects its EPS to be $1.06 for the same quarter. Moreover, the company surpassed consensus revenue estimates in each of the trailing four quarters, which is promising.
PYPL’s stock has soared 22.8% over the past nine months to close the last trading session at $69.43.
PYPL’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has a B grade for Momentum and Sentiment. It is ranked #17 in the 47-stock Consumer Financial Services industry.
Beyond what is stated above, we’ve also rated PYPL for Growth, Value, Stability, and Quality. Get all PYPL ratings here.
eBay Inc. (EBAY)
EBAY operates marketplace platforms that connect buyers and sellers in the United States, the United Kingdom, China, Germany, and internationally. The company's marketplace platform includes its online marketplace at eBay.com, off-platform businesses, and the eBay suite of mobile apps.
EBAY’s trailing-12-month gross profit margin of 72.03% is 95.3% higher than the industry average of 36.89%. Its trailing-12-month EBIT margin of 21.45% is 172.4% higher than the 7.88% industry average. Also, the stock’s trailing-12-month net income margin of 26.41% is 477.8% higher than the 4.57% industry average.
During the fiscal second quarter that ended June 30, 2024, EBAY’s net revenues increased 32% year-over-year to $2.57 billion. Its non-GAAP net income from continuing operations stood at $602 million and $1.18 per share, up 8% and 15% over the prior-year quarter, respectively.
Analysts expect EBAY’s revenue for the third quarter (ending September 2024) to increase 1.7% year-over-year to $2.54 billion. For the same quarter, the company’s EPS is expected to increase by 14.5% year-over-year to $1.18. Moreover, the company surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.
Shares of EBAY have gained 41.2% over the past nine months to close the last trading session at $56.68.
EBAY’s POWR Ratings reflect bright prospects. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system.
EBAY has an A grade for Quality and a B for Momentum. It is ranked #15 out of 51 stocks in the B-rated Internet industry.
In addition to the POWR Ratings highlighted above, one can access EBAY’s ratings for Growth, Value, Stability, and Sentiment here.
Fiverr International Ltd. (FVRR)
Headquartered in Tel Aviv, Israel, FVRR operates an online marketplace worldwide. Its platform enables sellers to sell their services and buyers to buy them. The company’s platform includes approximately 600 categories in ten verticals, including graphic design, digital marketing, writing, translation, video, and more.
FVRR’s trailing-12-month gross profit margin of 83.34% is 165.3% higher than the industry average of 31.41%. Likewise, its trailing-12-month levered FCF margin of 18.49% is 181.9% higher than the industry average of 16.56%.
FVRR’s revenues for the fiscal second quarter that ended June 30, 2024, increased 5.9% year-over-year to $94.66 million. Its gross profit rose 6.6% year-over-year to $78.64 million.
Moreover, its net income stood at $3.27 million, up considerably from the year-ago quarter. Also, its net income per share attributable to ordinary shareholders increased 800% over the prior-year quarter to $0.08.
Analysts expect FVRR’s revenue for the quarter ending September 2024 to increase 4.2% year-over-year to $96.39 million. Its EPS for the same quarter is expected to increase 10.1% year-over-year to $0.61. Moreover, the company surpassed the consensus EPS estimates in each of the trailing four quarters.
Over the past three months, the stock has gained 3.3%, closing the last trading session at $25.96.
FVRR’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which equates to a Buy in our proprietary rating system.
FVRR has an A grade for Growth and a B for Value and Quality. The stock is ranked #7 in the Internet industry.
Click here to access the additional FVRR ratings (Momentum, Stability, and Sentiment).
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PYPL shares were trading at $71.75 per share on Tuesday afternoon, up $2.32 (+3.34%). Year-to-date, PYPL has gained 16.84%, versus a 18.18% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
3 Gig Economy Stocks Thriving in a Post-Pandemic World StockNews.com
