Though the gig economy is growing worldwide with increasing demand for flexible and short-term working arrangements, shares of some companies that are benefiting by depending on independent contractors and freelancers have outrun their growth prospects. Examples are prominent gig economy stocks Airbnb (ABNB), Uber (UBER), and Fiverr (FVRR), which we think look significantly overvalued at their current price levels. So, they are best avoided now. Read on.The gig economy took off amid the COVID-19 pandemic, with companies' increasing reliance on independent contractors and freelancers. According to Gallup, roughly 36% of U.S. workers are part of the gig economy. Furthermore, 86.5 million people are expected to perform freelance work in the U.S. in 2027, according to Statista.
While the gig economy is expected to continue growing, with flexibility and contractual relationships becoming increasingly beneficial for both employers and workers, we believe some significant beneficiaries in this space do not possess adequate fundamentals to justify their current share-price levels.
Examples are popular gig economy stocks Airbnb, Inc. (ABNB), Uber Technologies, Inc. (NYSE:UBER), and Fiverr International Ltd . (NYSE:FVRR), which look significantly overvalued at the current price levels. So, we think it’s wise to avoid these stocks now.