RBC Capital has cut its target price for Fiverr International Ltd. (FVRR) to $16 from $28, while retaining a Sector Perform rating. The new target sits above Fiverr's current trading level of $12.35. Third-party Fair Value assessment data indicate the stock appears undervalued relative to that measure.
The brokerage characterized Fiverr's fourth-quarter results as mixed and flagged the company's 2026 guidance as a primary concern for investors. Management guided 2026 revenue and EBITDA which are 12% and 37% below Street expectations, respectively, describing the year as a transition and investment period. Those figures, RBC said, are likely to be interpreted as evidence of AI-related challenges impacting Fiverr's core marketplace.
Market reaction has already been severe: the share price is down more than 33% year-to-date and approximately 60% over the last 12 months. RBC's adjustment to its price target and cautionary stance reflect that investor unease.
Despite the negative near-term tone, RBC highlighted constructive elements in Fiverr's operating performance. The firm pointed to progress in attracting larger customers and higher-value transactions. Spend per buyer increased by 13%, which the broker said was above Street estimates. Transactions over $1,000 expanded 23%, and transactions above $10,000 rose 7% year-over-year. These shifts suggest movement toward larger-ticket work.
Fiverr's profitability metrics remain notable. The company reported gross profit margins of 81.16% and a PEG ratio of 0.15, metrics RBC used to argue there may be value relative to growth in the stock. InvestingPro has also identified 15 additional investment tips for Fiverr, including notes on its cash position and profitability outlook.
RBC's central concern is structural: the firm believes the lower end of Fiverr's marketplace - the simpler services and categories - is most exposed to AI disruption. More insulated, higher-complexity categories make up only about 15% of Fiverr's business, according to RBC. That concentration means the company faces a multi-year effort, rather than a short-term fix, to rebalance revenue toward less AI-vulnerable areas.
RBC emphasized that Fiverr must demonstrate the net benefits from higher-value, more complex categories can compensate for erosion in simpler offerings before the company's valuation multiple can stabilize or expand. In other words, visible and sustainable improvements in the mix of revenue will be required to reset investor expectations.
Additional market commentary followed Fiverr's quarterly disclosure. The company reported fourth-quarter earnings that topped profit expectations, while revenue narrowly missed analyst estimates. The more striking development for the street was the weak 2026 guidance, which fell well short of analyst forecasts and amplified investor concern.
In response to these developments, Needham revised its view on Fiverr, downgrading the stock from a Buy to a Hold. Needham attributed the downgrade to Fiverr's strategic pivot toward higher-value clients, a shift it expects will lead to a decline in gross merchandise volume by 2026. The firm also lowered its EBITDA forecasts by 38% for 2026 and 63% for 2027, while noting the pivot may be a necessary response to AI-driven disruption at the lower end of the market.
The combination of softer near-term guidance, evidence of disruption in simpler service categories, and the uncertain timeline for realizing gains from larger accounts has elevated investor scrutiny. For now, analysts and investors are watching whether Fiverr's move upmarket can accelerate fast enough to offset AI pressure on commoditized services.
Clear summary: RBC lowered its price target on Fiverr to $16 from $28, maintained a Sector Perform rating, and highlighted mixed Q4 results and 2026 guidance that imply AI-related headwinds. The firm noted initial gains in larger-customer spend but warned the company faces a multi-year path to mitigate AI disruption concentrated in simpler service categories.
Key points:
- RBC cut Fiverr's price target to $16 from $28, retaining Sector Perform; the new target is above the current price of $12.35.
- 2026 revenue and EBITDA guidance were 12% and 37% below Street expectations, respectively, and the year was characterized as a transition and investment period.
- Early signs of customer diversification include a 13% rise in spend per buyer, a 23% increase in transactions over $1,000, and a 7% rise in transactions over $10,000 year-over-year.
Risks and uncertainties:
- AI disruption is concentrated in simpler services, and mitigation may take years rather than quarters - this affects the online services and digital marketplaces sector.
- Guidance for 2026 materially below Street estimates raises the risk of continued investor discomfort and pressure on valuation multiples, with implications for technology and growth equity markets.
- Needham's lowered EBITDA forecasts for 2026 and 2027 (down 38% and 63%, respectively) underscore uncertainty around profitability during the strategic pivot, impacting expectations for earnings across the sector.