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FVRR is down 29% year-to-date and 14% on a one-year basis. It is a small name now ($827M market cap) and while sales and earnings continue to grow, its growth rates are slowing and analyst estimates are trending lower. But, it is now profitable, it trades at a cheap valuation of 9X forward earnings, it has no long-term debt, a cash position close to its total market cap ($724M), and it uses some of its free cash flows to repurchase shares. Short interest is fairly high at 10%, and much of the pessimism around the name is based on fear that AI tools will displace Fiverr gigs. Stock-based compensation is also rising, which is eating into its free cash flows. Some of the fundamentals are quite solid, but we feel that if management lowers stock based compensation, and began to really decrease share count through more buybacks, the price momentum could improve.
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