Why Fiverr International Stock Lost 17% Last Month
Shares of Fiverr International (NYSE: FVRR) fell by 17.1% in December, according to data from S&P Global Market Intelligence. This was a story of temporary gains being reversed by even larger price cuts. The freelance services reseller experienced that unfortunate pattern twice last month.
Fiverr entered December on a high note after gaining 13.6% in November. An impressive third-quarter earnings report briefly sent Fiverr's shares up by more than 20% in mid-November. Still, those gains faded over the next few weeks under the relentless pressure of high inflation and rising interest rates. Once again, Wall Street backed away from unprofitable growth stocks with lofty valuation ratios -- a description that used to fit Fiverr like a glove. The downward momentum carried over into early December, and the earnings-based gains of the previous month had been erased by Dec. 6.
The next rise-and-fall U-turn followed a week later. First, Fiverr's shares gained 5.7% in two days, goosed by an analyst's bullish report. Ronald Josey of Citi initiated coverage of the stock with a buy rating and a $45 price target, more than 40% above Fiverr's closing price on the day before his report. Josey described Fiverr as "innovative," and argued that the company should see wider margins and better profits over the coming year.
Source Fool.com
