In this article, we discuss 10 best gig economy stocks to buy now.
There is little doubt that digital platforms that directly connect suppliers and customers on a short-term basis and are pay-as-you-go, a practice referred to as the gig economy, have exploded in popularity over the past few years. New applications and websites are constantly springing up to cater to the different needs of the service industry. Some of these top firms have earned legendary status on Wall Street, including Uber Technologies, Inc. (NYSE:UBER), Block, Inc. (NYSE:SQ), and Airbnb, Inc. (NASDAQ:ABNB).
The gig economy is growing rapidly. A report by payments giant Mastercard reveals that global transactions associated with the gig economy will grow by 17% per year to about $455 billion by 2023. The report also states that 58% of global gig economy revenue comes from ride-sharing or transportation services in North America and the Asia Pacific region. Another interesting statistic in the report is that 56% of gig economy workers say they take gig jobs to earn money on top of their main source of income.
There are tens of millions around the world who are supporting this gig economy. Some estimates place the total number of gig economy workers at around 80 million. Freelancing platform Upwork estimates that nearly half of all gig economy workers live in urban areas. According to the findings of the study, freelancing contributes more than $1 trillion to the US economy every year. This represents 5% of the total GDP, putting the gig economy above major industries like construction as a driver of the economy.
Our Methodology
The companies that operate in the gig economy sector were selected for the list. In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks are also discussed. Data from around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
per-loov-4wOkqiXNP7M-unsplash
Best Gig Economy Stocks To Buy Now
10. Fiverr International Ltd. (NYSE:FVRR)
Number of Hedge Fund Holders: 16
Fiverr International Ltd. (NYSE:FVRR) operates an online marketplace worldwide. It is one of the best gig economy stocks to invest in. On June 29, the company announced that CreativeLive, a subsidiary of the firm, had acquired Wildist.co, a platform which provides online courses in outdoor and adventure photography. The firm said that the students currently enrolled will have full access to their subscriptions and workshops after the sale.
On August 5, Needham analyst Bernie McTernan maintained a Buy rating on Fiverr International Ltd. (NYSE:FVRR) stock and raised the price target to $50 from $40, appreciating the solid second quarter earnings of the firm.
Among the hedge funds being tracked by Insider Monkey, Washington-based firm Millennium Management is a leading shareholder in Fiverr International Ltd. (NYSE:FVRR), with 678,656 shares worth more than $23 million.
Just like Uber Technologies, Inc. (NYSE:UBER), Block, Inc. (NYSE:SQ), and Airbnb, Inc. (NASDAQ:ABNB), Fiverr International Ltd. (NYSE:FVRR) is one of the best gig economy stocks to buy now according to hedge funds.
In its Q1 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Fiverr International Ltd. (NYSE:FVRR) was one of them. Here is what the fund said:
“We sold out of Fiverr International Ltd. (NYSE:FVRR), the marketplace for freelance services, since the stock ran up multiple fold since our purchase less than a year ago and traded at a valuation that we thought captured much of the future opportunity.”
9. Rover Group, Inc. (NASDAQ:ROVR)
Number of Hedge Fund Holders: 17
Rover Group, Inc. (NASDAQ:ROVR) operates an online marketplace for pet care worldwide, offering services such as pet sitting, dog boarding, and dog walking. It is one of the top gig economy stocks to invest in. On July 15, investment bank Goldman Sachs predicted that the shares of the firm were likely to stay range-bound as the company makes strong inroads into the booming pet care business, but will likely be challenged by a market downturn due to macroeconomic uncertainty. On June 22, the firm joined the broad-market Russell 3000 Index, the small-cap Russell 2000 Index, and the Russell Microcap Index.
On July 7, JPMorgan analyst Cory Carpenter initiated coverage of Rover Group, Inc. (NASDAQ:ROVR) stock with a Neutral rating and a $5 price target, noting that the company was increasingly at risk of slowing growth in late 2022 given the growing macro headwinds.
At the end of the second quarter of 2022, 17 hedge funds in the database of Insider Monkey held stakes worth $118.9 million in Rover Group, Inc. (NASDAQ:ROVR), compared to 25 in the preceding quarter worth $180 million.
8. Grab Holdings Limited (NASDAQ:GRAB)
Number of Hedge Fund Holders: 25
Grab Holdings Limited (NASDAQ:GRAB) provides access to mobility, delivery, financial services, and enterprise offerings through its mobile application. It is one of the elite gig economy stocks to invest in. On August 25, the firm posted earnings for the second quarter of 2022, reporting a revenue of more than $321 million, up 79% compared to the revenue over the same period last year and beating market estimates by $48 million.
On July 28, Citi analyst Alicia Yap maintained a Buy rating on Grab Holdings Limited (NASDAQ:GRAB) stock and lowered the price target to $5 from $6, noting that the company reported relatively in line-ish Q2 results despite varied performance.
Among the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm Tremblant Capital is a leading shareholder in Grab Holdings Limited (NASDAQ:GRAB), with 28 million shares worth more than $70.9 million.
7. Upwork Inc. (NASDAQ:UPWK)
Number of Hedge Fund Holders: 25
Upwork Inc. (NASDAQ:UPWK) operates a freelance marketplace that connects businesses with various independent professionals and agencies worldwide. It is one of the premier gig economy stocks to invest in. On July 27, the firm posted earnings for the second quarter of 2022, reporting a revenue of $156 million, up more than 26% compared to the revenue over the same period last year and beating estimates by $9 million.
On September 23, BTIG analyst Marvin Fong maintained a Buy rating on Upwork Inc. (NASDAQ:UPWK) stock and lowered the price target to $24 from $30, citing the company’s “unexpected” CFO transition and the management affirming only Q3 but not FY22 guidance for the slashed target.
At the end of the second quarter of 2022, 25 hedge funds in the database of Insider Monkey held stakes worth $401.7 million in Upwork Inc. (NASDAQ:UPWK), compared to 26 in the preceding quarter worth $365.7 million.
6. Etsy, Inc. (NASDAQ:ETSY)
Number of Hedge Fund Holders: 29
Etsy, Inc. (NASDAQ:ETSY) operates two-sided online marketplaces that connect buyers and sellers. It is one of the most prominent gig economy stocks to invest in. A hotter-than-expected inflation report for the month of August has weighed on e-commerce stocks like Etsy in the past few weeks. On September 2, Bank of America started off coverage on the shares with a Neutral rating, noting that the high margin marketplace had strong competitive barriers as it does not directly compete with larger retailers and marketplaces.
On August 16, Truist analyst Naved Khan maintained a Buy rating on Etsy, Inc. (NASDAQ:ETSY) stock and raised the price target to $130 from $115, noting that the firm had positive medium to long term growth prospects despite the near-term slowdown and the tough macro environment.
Among the hedge funds being tracked by Insider Monkey, Washington-based firm Citadel Investment Group is a leading shareholder in Etsy, Inc. (NASDAQ:ETSY), with 2.1 million shares worth more than $153.8 million.
In addition to Uber Technologies, Inc. (NYSE:UBER), Block, Inc. (NYSE:SQ), and Airbnb, Inc. (NASDAQ:ABNB), Etsy, Inc. (NASDAQ:ETSY) is one of the best gig economy stocks to buy now according to hedge funds.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Etsy, Inc. (NASDAQ:ETSY) was one of them. Here is what the fund said:
“We took advantage of market volatility in the fourth quarter, using pullbacks to initiate eight new positions and add to recently established ones while closing another eight positions Seeding the Strategy with disruptive growth companies and broadening out the portfolio’s industry weightings have been central to our repositioning efforts in 2021. To this end, we added two new disruptors in the quarter: Etsy and CrowdStrike Holdings.
Etsy operates a number of online marketplaces with its flagship brand, Etsy, Inc. (NASDAQ:ETSY), an e-commerce destination for craft and artisan goods. We see the company’s scaled, two-sided network and focus on unique and special goods as competitive advantages. We believe Etsy, Inc. (NASDAQ:ETSY) has a long runway for growth ahead as it captures a greater share of the very large and growing global retail market. We view Etsy as a differentiated, early stage way to participate in the secular growth of e-commerce. We are also attracted to the company’s capital light business model and strong and improving profitability profile. Furthermore, our position increases our exposure to the consumer discretionary sector, where we have historically had less exposure.”
5. DoorDash, Inc. (NYSE:DASH)
Number of Hedge Fund Holders: 31
DoorDash, Inc. (NYSE:DASH) operates a logistics platform that connects merchants, consumers, and dashers in the United States and internationally. It is one of the best gig economy stocks to invest in. On September 27, the company announced that it had partnered with JP Morgan and Mastercard to roll out a credit card that will allow cardholders to earn rewards on and off the DoorDash platform. The firm has also recently partnered with Cobalt robotics to use AI robots to create smarter workplaces for employees.
On August 23, Wolfe Research analyst Deepak Mathivanan reiterated an Outperform rating on DoorDash, Inc. (NYSE:DASH) stock with a $110 price target, noting that the company’s significant profitability growth was masked by investments in long-term growth initiatives.
Among the hedge funds being tracked by Insider Monkey, Beijing-based investment firm Hillhouse Capital Management is a leading shareholder in DoorDash, Inc. (NYSE:DASH), with 4.7 million shares worth more than $301 million.
4. Lyft, Inc. (NASDAQ:LYFT)
Number of Hedge Fund Holders: 35
Lyft, Inc. (NASDAQ:LYFT) operates a peer-to-peer marketplace for on-demand ride sharing in the United States and Canada. It is one of the top gig economy stocks to invest in. On August 12, Tigress Financial analyst Ivan Feinseth maintained a Buy rating on Lyft, Inc. (NASDAQ:LYFT) stock and lowered the price target to $60 from $82, noting that the ongoing post-pandemic travel recovery and improving operating leverage give the firm a clearer path to profitability.
At the end of the second quarter of 2022, 35 hedge funds in the database of Insider Monkey held stakes worth $370 million in Lyft, Inc. (NASDAQ:LYFT), compared to 47 the preceding quarter worth $993.5 million.
In its Q2 2022 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Lyft, Inc. (NASDAQ:LYFT) was one of them. Here is what the fund said:
“Lyft, Inc. (NASDAQ:LYFT), the second-largest ride-hailing company in the US, connects riders and drivers over a mobile app. When we began our GardenSM campaign, our thesis was based on a likely strong ridership recovery post-pandemic, as well as management’s growing focus on increasing profitability after years of heavy investment. While the company has made some progress on margins as the economy has re-opened, driver shortages and fuel inflation have disrupted that progress. Given uncertainty around when these cost pressures could abate, we exited our position.”
3. Airbnb, Inc. (NASDAQ:ABNB)
Number of Hedge Fund Holders: 57
Airbnb, Inc. (NASDAQ:ABNB) operates a platform that enables hosts to offer stays and experiences to guests worldwide. It is one of the elite gig economy stocks to invest in. The shares of the firm have jumped in the past few months as international travel resumed following the pandemic lockdowns. On July 19, the shares were given a lift as Chinese premier Li Keqiang stated at the World Economic Forum that China will continue to pursue reopening policies with the continuation of international travel.
On September 23, Tigress Financial analyst Ivan Feinseth maintained a Buy rating on Airbnb, Inc. (NASDAQ:ABNB) stock and lowered the price target to $160 from $214, noting that the company’s strong brand equity and industry-leading status as the alternative lodging provider remained intact.
Among the hedge funds being tracked by Insider Monkey, New York-based Renaissance Technologies is a leading shareholder in Airbnb, Inc. (NASDAQ:ABNB), with 5.6 million shares worth more than $499 million.
In its Q2 2022 investor letter, Brick By Brick Capital, an asset management firm, highlighted a few stocks and Airbnb, Inc. (NASDAQ:ABNB) was one of them. Here is what the fund said:
“What is millennial tech?
It is a term I have coined to describe the type of companies I research. It is a disruptive technology that is changing the status quo of a given industry. For example, Airbnb (NASDAQ:ABNB) with the lodging industry. This definition casts a wide net in terms of what sectors I look at, but it is very specific in terms of what type of companies I look at. I also believe focusing on these companies gives me an inherent edge over Wall St. as they are often older and disconnected from what is truly innovative (…read more)
2. Block, Inc. (NYSE:SQ)
Number of Hedge Fund Holders: 72
Block, Inc. (NYSE:SQ) creates tools that enable sellers to accept card payments and provides reporting and analytics, as well as next-day settlement. It is one of the premier gig economy stocks to invest in. On August 8, investment advisory Barclays maintained an Overweight rating on Block, Inc. (NYSE:SQ) stock and lowered the price target to $130 from $150. Analyst Ramsey El-Assal issued the ratings update.
Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm ARK Investment Management is a leading shareholder in Block, Inc. (NYSE:SQ), with 9.1 million shares worth more than $799 million.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Block, Inc. (NYSE:SQ) was one of them. Here is what the fund said:
“Block, Inc. (NYSE:SQ) provides point-of-sale technology to small businesses and operates the Cash App ecosystem of financial services for individuals. Shares fell due to mixed quarterly results with more modest growth in the Seller business offsetting strength in Cash App. While integration of recently acquired Afterpay is progressing well and credit metrics remain healthy, the buy-now-pay-later business slowed due to greater competitive intensity. We continue to own the stock due to Block’s long runway for growth, sustainable competitive advantages, and unique corporate culture.”
Given this cash-generation power, we are naturally drawn to what we believe are strong and profitable financial institutions when the price is right. Presently, we believe the valuations of our financial holdings are not only reasonable, but extremely compelling, and our portfolio composition reflects this view. Representative financial holdings in the Fund includes Wells Fargo.”
1. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 129
Uber Technologies, Inc. (NYSE:UBER) develops and operates proprietary technology applications worldwide. It is one of the most prominent gig economy stocks to invest in. In late September, the firm announced that it had partnered with automaker Stellantis to focus on the French electric vehicle market. The companies said that they were working beside mobility brand Free2Move, which will enable Uber to transform 50% of its fleet in France to electric models.
On August 3, MKM Partners analyst Rohit Kulkarni maintained a Buy rating on Uber Technologies, Inc. (NYSE:UBER) stock and raised the price target to $40 from $32, noting that the company’s Q2 beat the expectations.
At the end of the second quarter of 2022, 129 hedge funds in the database of Insider Monkey held stakes worth $5.3 billion in Uber Technologies, Inc. (NYSE:UBER), compared to 144 in the preceding quarter worth $8.5 billion.
In its Q2 2022 investor letter, RiverPark Funds, an asset management firm, highlighted a few stocks and Uber Technologies, Inc. (NYSE:UBER) was one of them. Here is what the fund said:
“Uber Technologies, Inc. (NYSE:UBER) is a global technology platform that enables the transportation of people and products across cities and countries. The company’s three main business lines are 1) Mobility where the company is the number one or two player in the app-based personal transportation market in 10,000+ cities globally, 2) Delivery- (Uber Eats in the US) home delivery of prepared meals, grocery, liquor, and increasingly general retail products in seven of the top ten GDP markets globally, and 3) Freight- the largest global marketplace for end-to-end freight solutions including one million digitally connected truck drivers. In the company’s most recent quarter, it grew gross bookings 35% year over year, consummated transactions with 115 million unique customers, completed 1.7 billion trips a month, and all three divisions were adjusted EBITDA positive (…read more)
You can also take a peek at 10 Best Ethanol Stocks To Buy Now and 10 Best Stocks to Buy According to David Rodriguez-Fraile’s BlueMar Capital.
Follow Insider Monkey on Twitter
Suggested Articles:
- 15 Best Short Squeeze Stocks to Buy Now
- 10 Best Cyclical Stocks To Buy in 2022
- 12 Best EV Stocks to Buy Now
Disclosure. None. 10 Best Gig Economy Stocks To Buy Now is originally published on Insider Monkey.
