Better Buy: Fiver vs. Upwork

 More than a third of American workers are now part of the "gig economy," which consists of private contract work. This percentage could continue to rise as new job opportunities emerge on online platforms such as Riverr (NYSE:  and Upwork (NASDAQ: .

Riverr, founded 11 years ago, allows users to post or receive gigs starting at $ 5. Up work, which includes two older platforms  and Desk) six years ago, connects companies with freelancers.

A young woman works in front of her computer at home.

PHOTO SOURCE: GETTY IMAGES.

Fiverr came out publicly in June 2019 for $ 21 per share, closed for about $ 40 on the first day, and currently trades for about $ 230. Up work went public in October 2018 for $ 15 per share, closed almost $ $ 21 on the first day, and it finally doubled to about $ 46 today.

Fiver  has generated greater profits than Up work, but we should not judge stocks based on their previous performance. Let’s take a look at these two growing companies and see which investment is best.

How do Fiver and Up work make money?

 Its take-off, or percentage of each transaction you keep as revenue, has increased from 26.7% in 2019 to 27.1% in 2020.

Fiver generates about 70% of market revenue from five countries: U.S., U.S., Canada, Australia and New Zealand. Its platform offers over 500 gig categories, including construction, marketing and writing activities.

Up work generates most of its revenue from the cost of independent services, which includes transaction fees and the sale of real bidding tokens in market operations. It also charges its business customers fees for subscriptions and salary services.

Up work's market share is much lower than Fiver's, but it has still risen from 13.1% in 2019 to 13.6% in 2020. Its market is divided into more than 70 categories and its freelancers are located in more than 180 countries around the world, although it has limited physical availability outside the US

What is the fastest growing platform?

The epidemic has produced the tail tails of River and Up work as people rely heavily on remote jobs and opportunities for independence.

A woman wearing a medical mask works on her laptop at a coffee shop.

PHOTO SOURCE: GETTY IMAGES.

Fiver's revenue increased by 77% to $ 189.5 million by 2020. It finished the fourth quarter with 3.4 million active consumers, an increase of 45% year-on-year, as its average consumption per consumer increased by 20% to $ 205.

Its revised limit rose from 81% in 2019 to 83.7% by 2020 due to its growing revenue and take-up rate, and sent a non- profit of $ 10.4 million annually, compared to a loss of $ 16.8 million in 2019.

It also produced an adjusted of $ 9.1 million, compared to a loss of $ 18 million in 2019.

Up work's revenue increased by 24% to 373.6 million by 2020. Its GSV (total service volume), which measures the total amount spent by its clients and users, increased by 21% to $ 2.5 billion.

Its total annual margin has increased from 71% to 72% due to the high rate of pick-up and growth in revenue.  revenue increased by 11% to 6.1 million, while its revised increased by 89% to 14 million.

Those growth rates are impressive, but both companies are not benefiting from measures. Fiver net loss decreased from $ 33.5 million in 2019 to $ 14.8 million by 2020, but Up work's total loss increased from $ 16.7 million to $ 22.9 million.

Rosy's expectations

Fiver expects his earnings to increase by 46-50% by 2021, and for his revised to grow by 98% -131%. Wall Street expects its earnings and non- earnings to increase by 52% and 31%, respectively, this year.

Fiver plans to continue expanding his reach in the segment and overseas markets, and believes his cash flow rate will "improve" as it unveils new features for freelancers and integrates with its recent acquisition of Working not Working, a high-end market for creative talent.

Up work expects revenue to increase by 23% -26% by 2021, reaffirming its goal of generating more than 20% in the future. Analysts expect that revenue will increase by 25% this year.

Up work expects its adjusted growth of  to remain flat in the middle as it continues to grow, but analysts expect it to reduce its non- losses per capita this year.

But remember the powerful balance

Fiver trades more than 190 hours earnings ahead and nearly 30 trading hours this year. That high rate can reduce its peak strength, especially as high yield yields make the transition from growth stocks to stock prices.

Up work looks 12 times cheaper this year’s sales, but still better than other tech stocks that produce similar growth rates. Salesforce, for example, is expected to generate 21% sales growth this year, but sell below a forecast of less than eight times.

Choosing value over growth

Fiver's growth rate is impressive, but I don't want to pay the wrong amount for the right company in this changing market. Up work stock is not cheap, but I believe a better balance of price and growth will make it a safe bet for the growing gig economy this year.

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This document represents the author's opinion, which may not agree with the "official" recommendation of Motley Fool's premium advisory service. We are motley! Asking about the concept of investing - even one of us - himself