Bull of the Day: Upwork (UPWK)

Upwork (UPWK) is a Zack Rank #1 (Strong Buy) that operates a global online marketplace that connects businesses with independent professionals and agencies for a wide range of freelance services.

The stock sold off during the last few months, but is now trading near 2025 highs after a solid earnings report. The bulls are looking for a breakout, so let's dig into the name and see why buyers are coming in.

About the Company

Upwork’s platform facilitates remote collaboration across various fields, including writing, graphic design, web development, marketing, and more.

Founded in 2013 and originally known as Elance-oDesk, the company is headquartered in Palo Alto and employs 600 full-time staff.

Upwork is valued at $2.1 billion and has a Froward PE of 14. The stock has Zacks Style Scores of “C” in Growth and Momentum. However, UPWK has an “D” score in Value.

Q1 Earnings Beat

Upwork delivered a strong Q1 2025 performance, beating expectations on both the top and bottom lines. The company reported revenue of $192.7 million, up from $190.9 million year-over-year, and adjusted earnings of $0.27 per share, compared to $0.22 in Q1 2024. This beat expectations by 36%.

Adjusted EBITDA surged to a record $56 million, representing a 29% margin, up significantly from $33.3 million and a 17% margin the previous year. Free cash flow came in at $30.8 million, and non-GAAP gross margin reached 78.3%.

However, gross services volume (GSV) declined 2.1% to $987 million, and active clients fell 7% to 812,000, reflecting some ongoing top-of-funnel macroeconomic pressures. Despite this, CEO Hayden Brown emphasized that strategic investments in AI are already driving customer engagement and productivity, laying the groundwork for long-term market share gains.

Upwork guided Q2 revenue between $184–189 million and adjusted EBITDA between $45–49 million, with margins expected to normalize from Q1's peak. For the full year, the company reaffirmed its revenue outlook of $740–760 million but raised its adjusted EBITDA guidance to $190–200 million (up from $180–190 million) and EPS to $1.14–1.18.

Upwork Inc. Price and EPS Surprise

Upwork Inc. price-eps-surprise | Upwork Inc. Quote

Estimates Tick Higher

Not much analyst coverage on this name yet, but estimates have ticked higher since the earnings report.

For the current quarter, estimates have gone from $0.25 to $0.26 over the last 7 days. For next quarter, we see similar movement, going from $0.26 to $0.27.

For the current year, estimates have gone from $1.04 to $1.14, a jump of 10%.

The longer-term trends look good, with estimates for next year going from $1.19 to $1.33 over the last 90 days. This is an increase of 12%.

Analysts were not excited enough to raise price targets. Needham reiterated their Buy rating, but held their $19 target. RBC Capital left their $18 target and Sector Perform.

The Technical Take

Last October the stock broke out from the $10 level after a positive earnings report. From there, the stock traded sideways and then fell to $11 during the April sell off. The stock has made its way back to the $16 area and looks poised to go higher.

The bulls have broken Fibonacci resistance and can now target the 161.8% Fib extension at $22. However, this market is volatile, so let’s look at some possible entry points.  

Here are some support levels:

21-day: $13.75

50-day: $13.60

200-day: $13.50

Fibonacci Support levels reside at $15 (50%) and $14.70(61.8%).

If the stock pulls back, the Fibonacci levels would give solid entry points with investors able to lean on those moving averages.

In Summary

Upwork is showing renewed strength after a period of weakness, supported by improving fundamentals, a bullish earnings surprise, and increasing investor interest.

The company’s strategic pivot toward AI integration appears to be gaining traction, driving both customer engagement and long-term profitability. With upward earnings estimate revisions, improving margins, and bullish technical momentum, UPWK offers an intriguing setup for growth-oriented investors.

While valuation and macro headwinds remain, the current chart structure and strengthening outlook suggest the stock could have meaningful upside from current levels.

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This article originally published on Zacks Investment Research (zacks.com).

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