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The move comes after BTIG identified UPWK “as one of our top picks entering 2023 as we believed shares had overshot to the downside after a very tough 2022.”
“We saw underappreciated catalysts in take-rate growth and margin expansion from tighter expense management. Those catalysts have played out with UPWK making a take rate-accretive changes to the commission structure earlier this year as well slashing its FY23 brand marketing spend,” the analysts wrote in a client note.
However, they have made a rating revision after the stock rose more than 40% year-to-date.
“While there are arguments for why we think UPWK should enjoy a premium valuation such as its number one position in the space and longer runway for take-rate expansion, we believe UPWK’s valuation adequately reflects those positives and risk-reward is now balanced,” they concluded.
Shares are down over 2% in pre-open trading.
