Upwork (UPWK) Upgraded

Upwork Inc. (NASDAQ:UPWK) was established in 2014 as a result of a merger between rivals Elance and oDesk. It is one of the world’s leading online freelancing marketplaces, helping businesses find qualified independent professionals holding skills that range from graphic designing and content writing to customer service and marketing. The company generates most of its revenue by taking a certain fee from freelancers depending on the amount of money they make. Moreover, it also generates revenue by offering premium membership and subscription services.

The Santa Clara, California-based company went public in October 2018 by selling about 12.5 million shares at $15 for total proceeds of $187 million. UPWK had a market value of approx. $1.5 billion at the time of IPO.

Upwork enjoyed massive growth during the last year. Its stock value climbed over 300 percent in 2020 mainly due to the Covid-19 outbreak that forced governments around the world to impose lockdowns to contain the spread of the virus. Millions of people across the globe lost their jobs due to the pandemic and were left with no choice but to rush to freelancer websites including Upwork to find work. Meanwhile, many businesses commenced online hiring through top freelancer marketplaces that drove revenue for Upwork and others in the space.

The mass roll-out of the Covid-19 vaccine will certainly help a lot of things to go back to normal. But when it comes to remote workplaces, many suggest that a large percentage of people will continue to work from home even after the end of the pandemic. According to a survey released by Upwork last month, hiring managers believe that 37.5 percent of employees at their firms will keep working remotely at least for the next five years, significantly higher than 21.2 percent before the pandemic. Therefore, we can certainly expect freelancer marketplaces like Upwork to grow at a reasonable pace in the coming quarters.

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Citigroup recently upgraded its ratings for UPWK from “Neutral” to “Buy” and lifted its price target for the stock to $48 per share, citing better growth prospects for the company in 2021 and beyond. Upwork shares climbed over 12 percent in the previous trading session following the upgrade.