The 10 Best Gig Economy Stocks To Buy In 2024

Our picks for the best gig economy stocks to watch and invest in.

The best gig economy stocks to buy in 2024 are those that support the digital landscape by connecting short-term suppliers with pay-as-you-go customers.

Companies that provide a continuous stream of innovative applications and websites addressing diverse service industry needs offer a wealth of promising gig economy opportunities.

The most successful fund and investment managers are looking at the following gig economy stocks to lead the charge in this exciting investment landscape:

The 10 Best Gig Economy Stocks To Buy In 2024

The gig economy is replacing traditional, full-time jobs with freelance work, including industries like transportation, construction, hospitality, and technology, which offer cost-saving opportunities for companies.

Investing in gig economy stocks is a logical choice for every investor as the number of companies embracing this trend grows globally each year.

Our research revealed this list of the 10 best gig economy stocks to buy in 2024:

10. Alphabet (GOOG, GOOGL)

Alphabet is one of the largest gig economy stocks, and analysts expect that the company will continue to dominate the gig economy.

Pros

Google's widespread search engine use, YouTube's monetization opportunities, and business-related services make it an essential tool for gig workers and companies.

With control of 90% of the online search market and the lowest forward P/E ratio, it’s the most attractive of the Silicon Valley technology companies.

Google Cloud made strong earnings in 2022 and looks set to continue its growth in the following years, competing against Azure and AWS.

Cons

Alphabet's stock may not directly represent a gig economy investment, and its performance can be influenced by various factors beyond the gig economy.

A major downturn in the gig economy could see advertising revenues decreasing, which will have a detrimental effect on the stock price.

Why We Like It:

Google is the leader in digital advertising, and it continues to generate substantial revenue from online ads, benefiting from the continued growth of online advertising.

While digital advertising is a primary revenue source, Google is actively diversifying its business with Google Cloud and expanding into new technology areas.

Google has a solid financial foundation with robust revenue growth, strong profit margins, and substantial cash reserves, providing resilience in the face of economic challenges.

9. Microsoft (MSFT)

The Microsoft brand dominates the gig economy by providing various software products that enable companies to run their operations.

Pros

Microsoft's essential role in most business software stacks and widespread use makes it crucial for freelancers and companies in the gig economy.

The company’s predictable revenue and cloud service Azure growth, combined with management’s share buybacks, make for a strong price.

Cons

Microsoft faces stiff competition from the likes of Apple and Alphabet, especially in the mobile market in which it has limited exposure.

Companies like Apple and Alphabet, which have significant investments in this area, can pose a risk to Microsoft's future growth.

Why We Like It:

They have a history of highly predictable revenue, which provides stability to investors' portfolios and is a highly desirable and sought-after characteristic.

Microsoft's Azure cloud computing platform has also shown strong historical growth, with cloud services experiencing increasing adoption, which is indicative of positive future earnings.  

8. H&R Block (HRB)

H&R Block's position as a leading tax software provider offers an essential tax prep checklist service for gig workers facing complex tax compliance.

Pros

As a leading tax software provider, H&R Block offers an essential service for gig workers facing complex tax compliance.

It’s one of the gig economy stocks that’s shown strong historical performance, with the gig economy providing the impetus for ongoing revenue growth and profitability.

Cons

With an initial cost of $55, H&R Block is not the cheapest option for filing taxes unless you qualify for their free package.

The higher cost and additional fees, such as state return fees and fees for added services like Online Assist or full-service preparation, may hamper growth.

Why We Like It:

H&R Block has performed exceptionally well in the past year, with its stock gaining 71.2%, significantly outperforming its industry with average earnings of 13.9%.

The company also has expected long-term earnings per share growth rate of 12.5% with a five-year strategy in place called "Block Horizons."

7. Shopify (SHOP)

Gig economy stocks such as Shopify offer investors a way to cash in on the trend to earn extra income through freelance work.

They provide an e-commerce platform enabling gig workers to set up their online stores, offering crucial financial tips to ensure success.

Pros

Shopify, as an alternative for small merchants compared to dominant players like Amazon, has seen substantial revenue growth.

They are popular with new entrants to the market and currently enjoy a 28% share of the e-commerce platform market in the U.S.

Cons

The e-commerce space is competitive, and Shopify needs to continue to expand its services to maintain its growth.

The stock is volatile, with shares priced at around 68% off their all-time high from November 2021, with other gig economy stocks offering more stability.

Why We Like It:

Shopify, which provides an e-commerce platform that enables gig workers to set up their online stores, is one of the best-known and most popular gig economy stocks.

The company continues to report impressive gains, with revenue and gross merchandise sales up 31% and 17%, respectively, in the latest quarter (Q2 2023).

6. Upwork (UPWK)

Upwork, at the forefront of the freelance work industry, is part of an independent contractor trend sweeping the world.

Pros

Upwork offers high-quality professional services with over 18 million gig workers and five million loyal clients, making it one of the leading freelance tools.

The company, which reported strong earnings and revenue growth of $618.32 million, offers ongoing opportunities for freelancers across a range of industries to find high-paying gigs.

Upwork maintains a high gross margin of 74.92%, which is indicative of the effective monetization of its services and bodes well for the future.

Cons

Of some concern is Upwork’s reported negative earnings per share (EPS) of -$0.50, with the company not yet turning a profit.

The stock price has shown significant volatility in the past, with its 52-week price range of $6.56 to $15.88, making it a riskier investment.

Why We Like It:

Upwork is the world's largest online marketplace for freelancers, with its leading position in the gig economy offering the potential for further expansion.

We expect this expansion to continue as the platform offers advice on how to become a freelancer and profit from the huge demand.

The company maintains a high gross margin, effectively monetizing its services by offering a broad range of skills and expertise.

5. Fiverr (FVRR)

Companies moving towards freelance work to scale their businesses and drive growth benefit from gig economy stocks like Fiverr.

Pros

Fiverr International turned profitable in Q2, which is a positive sign for investors as the company's financials have shown major signs of improvement.

The stock has experienced a significant price drop, bringing its price-to-sales (P/S) valuation to a modest 2.7 and a forward price-to-earnings (P/E) multiple of 13.

Cons

Generative AI poses a possible long-term threat as it may reduce the demand for workers with certain skill sets, such as writing and coding.

Fiverr's headquarters are located in Tel Aviv, Israel, exposing it to potential disruptions caused by geopolitical conflicts in the region and disinvestment.

Despite some improvements, Fiverr's revenue growth has recently slowed, with only a 3% increase in revenue in the first half of 2023.

Why We Like It:

Fiverr is a major player in the online gig work marketplace, connecting buyers and freelancers for various services, including logo design, SEO, and website development.

The recent move to profitability and its low historical price make the stock an attractive bargain for investors with an appetite for higher-risk opportunities.

4. DoorDash (DASH)

DoorDash is one of the most popular and well-known food delivery services in the U.S., providing hundreds of thousands of jobs in the gig economy.

Pros

DoorDash appears to be fairly priced at around 18% below its intrinsic value, indicating a potential buying opportunity for some investors.

The company's earnings are expected to increase by 88%, suggesting a highly optimistic future with the potential for robust cash flows and higher share value.

DoorDash has a 59% market share in the U.S., making it the top food delivery platform, and it currently trades at four times this year's sales.

Cons

DoorDash's share price is fairly volatile, and its high beta indicates that its price movements are magnified relative to the rest of the market.

Amazon's partnership with Grubhub, which allows it to offer free Grubhub+ subscriptions to Prime members, poses a threat to DoorDash's market share and growth potential.

Why We Like It:

DoorDash is an excellent investment as it is currently trading at a price considered to be fair, around 18% below its intrinsic value.

The company is expected to experience significant future growth, potentially leading to more robust cash flows and a higher share value.

With optimistic growth, a volatile price, and a high beta, the stock presents a great opportunity to get in if the price dips lower.

3. AirBnB (ABNB)

Airbnb is one of the gig economy examples that has managed to make a strong comeback after the pandemic wreaked havoc on the tourism sector.

Pros

Airbnb has rebounded well after the pandemic, with its highly successful IPO showing lots of positive sentiment from investors with an eye on future growth.

The stock has shown significant growth since its IPO in December 2020, with a 223% increase in just over two months.

Being included in the S&P 500 is generally considered another positive sign by analysts, indicating the company's prominence in the market.

Cons

The travel industry can be cyclical, and it's subject to various regulations, with the platform relying on individual hosts, leading to inconsistencies in quality.

The stock has experienced a few tough weeks, along with its fellow travel stocks, and its price has fallen below the 200-day moving average.

Why We Like It:

The company has shown solid earnings growth, with a 75% increase in Q2, and despite some deceleration in top-line growth, the overall financials seem strong.

Historically, the stock has rebounded, and a new base seems to be forming, indicating a milder correction with less selling pressure.

Citigroup raised its price target on Airbnb stock, and the company's inclusion in the S&P 500 is a positive indicator.

2. Lyft (LYFT)

Lyft is another one of the gig economy stocks that has struggled to reach profitability but is now looking good in the ride-sharing niche.

Pros

They reported an increase in revenues of 3% to $1.021 billion in the second quarter of 2023 and growth in rideshare rides of 18% year-on-year.

The continued uptick in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) could potentially indicate improving operational efficiency, resulting in a move to profitability.

The regular increase in dividends by Lyft is also seen as a positive sign for shareholders, providing them with additional income.

Cons

Lyft has a much smaller market capitalization than ride-sharing-rival Uber, which might make it more vulnerable to market fluctuations.

The company has yet to generate a profit, and there are concerns about its bottom-line performance compared to analyst estimates.

The company reported a net loss of $114.3 million compared with a $187.6 million loss in Q1 2023 and $377.2 million in Q2 2022.

Why We Like It:

Lyft continues to increase its revenues, and management’s efforts to reduce ride-sharing costs indicate the potential for continued financial growth into profitability.

Despite challenges, there is a continued uptick in EBITDA, excluding special items, suggesting that cost restructuring is working as planned.

1. Uber (UBER)

Uber is our favorite of all the gig economy stocks, offering services to cities across the globe by providing delivery drivers and ride-sharing options 24/7.

Pros

Uber holds a dominant position in the ride-sharing industry, with a significant market share worldwide and diversified revenue streams in food delivery and courier services.

With its growing user base and expanding service offerings, Uber has the potential for a continued upward trajectory by providing convenient transportation solutions globally.

Uber has the best gig economy jobs and turned a profit for the first time on an adjusted basis in Q3, a positive sign for investors.

Cons

Uber faces challenges related to the classification of drivers as freelancers vs. employees, which can have legal and financial implications.

The company faces challenges with high cash burn and weak profitability due to spending on training, recruiting drivers, and offering free rides.

Uber's 20% stake in the Chinese ride-hailing company Didi has become a concern due to the recent decline in Chinese stocks and regulatory challenges.

Why We Like It:

Uber recently turned a profit in Q3, showing a positive trend in its financial performance coming from its ride-hailing and restaurant delivery segments.

Despite challenges in its core taxi business during the pandemic, Uber adapted by focusing on increasing its food delivery operations, showcasing resilience and adaptability.

Summary

It’s important to remember that all the best gig economy stocks depend on a strong economy to meet their profit projections for 2024.

With the current state of the gig economy, especially rising inflation and high-interest rates, it could be a difficult year ahead for some companies.

Always remember to do your due diligence, bearing in mind that analyst estimates are based on a variety of factors that are usually incorrect.