Insider transaction activity can help investors cut through market noise. Insiders are some of the most informed participants in the market meaning their buying and selling activity can provide powerful trading signals.
In this report, we are going to highlight some interesting insider buying at Upwork Inc (UPWK:US). Upwork is an online company that operates an employment marketplace. Through its platform, businesses can hire highly-skilled freelancers from a wide range of industries. The stock is listed on the NASDAQ Global Select Market and currently has a market capitalization of $2.29 billion.
Upwork Inc: Insider Buying
Our data shows that on May 12, board member Kevin Harvey snapped up 65,828 Upwork shares at a price of $16.32 per share. This trade cost the insider approximately $1.07 million and increased his holding to 813,992 shares.
This purchase is worth highlighting due to the fact that Mr. Harvey is a seasoned entrepreneur with over 20 years of successful venture investing experience. After founding two successful software companies, Mr. Harvey co-founded Benchmark Capital in 1995. Since then, he has invested in many start-ups in the software, infrastructure, mobile, and consumer segments – dozens of which have reached successful M&A exits. Given his background, he is likely to have an excellent understanding of Upwork’s investment potential.
What’s interesting about this trade is that it represents Mr. Harvey’s first open-market purchase since the company’s IPO in 2019. This indicates that he sees value in the stock at present.
Upwork shares have experienced a significant decline over the last six months as valuations have been compressed. However, the company continues to grow at a healthy clip.
In the first quarter of 2022, for example, gross services volume (GSV) was up 27% year on year to $1.0 billion while revenue was up 24% year on year to $141.3 million (versus the consensus forecast of $136.3 million). Enterprise revenue grew 55% year on year to $10.8 million while the number of enterprise clients rose 33% year on year.
At the end of the quarter, the company had 793,000 active clients, up 16% year on year. And GSV per active client in Q1 was up 18% year on year to $4,752.
Looking ahead, Upwork said it expects revenue growth of around 20% year on year for the second quarter of 2022. It also expects full-year revenue of $590 to $610 million, versus $503 million in 2021.
In light of this growth, we see the insider buying here as a bullish indicator.