1 Growth Stocks Worth Buying Now Down to 42% Only

It is better to time the market than to time the market. This is no secret. Legendary investors don't get rich by day-trading the hottest stocks, they get rich by owning the leading stocks that change the rules of the market for years or even decades.

That is, even Warren Buffett prefers to buy incredibly overpriced companies. Holding stocks for the long term is made sweeter when you start from a severely undervalued starting point.

This is today'sFiverr International (NYSE: FVRR)An undervalued growth stock with a small share price but great long-term business prospects.

Fiverr's fast-growing business

The company's ambitions are revolutionary.

As a leader in the gig economy, Fiverr wants to "change the way the world carries on". Koon estimates that the addressable market for creative, technical, and professional freelancers in the U.S. will be worth $247 billion by 2021, and that nearly all of that market is being managed through offline channels.Upwork (NASDAQ resonance code: UPWK)They are by far the two largest companies in the field, with combined revenues of only $1.1 billion last year. The untapped opportunity is huge.

So Fiverr has a long way to go, but the company is off to a good start.

• Fiverr has 4.1 million active service buyers.

• Annual revenue growth in 2023 is 71 TP3T, compared to 131 TP3T in 2022, a year of severe inflation.

• The company is looking for new ways to serve customers, both buyers and sellers, and to capture new revenue streams. the Fiverr Pro and Fiverr Enterprise services are quickly becoming important drivers of new business, while the Fiverr Neo chatbot highlights the company's ability to capitalize on the trend toward customer-friendly technology. fiverr is launching all three services in 2023. Fiverr launched all three services in 2023.

• The business is highly profitable, with profits growing across the board, turning profitable in 2023 and free cash flow growing by 28% to US$82m.

What you see here is a perfectly healthy company pursuing high growth in a huge market, with an even broader outlook when you factor in Fiverr's international expansion plans, and a company that is already profitable.

But the stock price continues to fall.

However, many investors still can't get over the fact that Fiverr's freelance services epitomize the pandemic lock-in philosophy. The company's growth fuel should have been exhausted by the time a successful vaccine began to restore the business world of remote work to more traditional ways of operating.

As a result, Fiverr's stock is trading at 94% below its all-time high in early 2021, just before the COVID-19 vaccine rollout began, and the stock has changed hands at a bargain valuation of 9.8x free cash flow or 2.2x sales. And skeptics are still manipulating Fiverr's watch. The stock fell 42% last year, including 26% so far this year.

Long story short, Fiverr is an ambitious and profitable company with ambitious growth plans and the ambition to change the nature of work and careers.

Bearish investors are looking at a falling knife here, and if you try to catch it on the way down, you're more likely to hurt your hand than help your portfolio.

Mr. Market made a big mistake on Fiverr.

I disagree. In my opinion, Fiverr is a seriously undervalued growth stock with great potential for long term profitability. I will buy it as long as the valuation is reasonable, and the current discount puts me in no doubt about buying it.

Fiverr is one of the first hot deals I look at whenever I'm looking for new investment capital. I highly recommend adding this stock to your "buy" list. Just to get back to its record price in early 2021, you'd get a 20-fold return on your investment today. Since then, sales have nearly doubled and free cash flow has grown by more than 500%.

This little freelance service coordination company is thriving.

Should you invest $1,000 in Fiverr International now?

Consider this before buying shares of Fiverr International:

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*Stock Advisory Rates as of April 8, 2024

Anders Bylund owns shares of Fiverr International. the Motley Fool owns shares of Fiverr International and recommends Fiverr International. the Motley Fool recommends Upwork. the Motley Fool has a Disclosure Policy.

1 Growth Stocks Only Down 42% Now Worth Buying was originally published by The Motley Fool.