Key Takeaways:
- AI-Driven Transformation: GSV from AI-related work surged 53% year-over-year in Q3.
- Price Projection: Based on current execution, UPWK stock could reach $23.52 by December 2027.
- Potential Gains: This target implies a total return of 17% from the current price of $20.03.
- Annual Return: Investors could see roughly 8.7% growth over the next 1.9 years.
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Upwork Inc. (UPWK) just returned to growth after five quarters of headwinds, posting its first quarterly revenue above $200 million while delivering record profitability.
The company grew revenue to $201.7 million in Q3 2025, up from prior quarters, and achieved an adjusted EBITDA margin of 29.6%.
CEO Hayden Brown is executing a transformation strategy centered on AI-native platform development.
Upwork’s proprietary AI agent, Uma, is now integrated across 70% of new client workflows. Gross Services Volume (GSV) returned to positive territory at 2% year-over-year growth in Q3, marking an inflection point two quarters ahead of management’s original projections.
AI-related work is accelerating rapidly on the platform.
- The number of clients engaging in AI projects jumped 45% year-over-year, while Business Plus adoption grew 36% quarter-over-quarter.
- The company recently launched Lifted, a new enterprise subsidiary, to capture the $650 billion contingent work market.
Despite strong momentum, Upwork stock trades at $20, offering upside for investors who recognize the company’s position in the future of work.
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What the Model Says for Upwork Stock
We analyzed Upwork’s transformation into the world’s leading human- and AI-powered marketplace, with multiple growth catalysts activating simultaneously.
The company is pioneering a unique approach to AI integration. Rather than simply automating work, Upwork is building a marketplace where AI agents and human talent collaborate to deliver outcomes.
The platform now hosts over 250,000 AI experts across 10,000 skill categories, creating an unmatched talent pool for companies navigating the AI era.
Uma, Upwork’s AI agent, has already driven $100 million in incremental GSV in 2025 through improved search, matching, and proposal writing.
This figure only includes features launched in the first half of the year, suggesting a significant runway ahead.
The company maintains 10 petabytes of proprietary work data that no competitor can replicate.
Using a forecast of 7.1% annual revenue growth and 26.8% operating margins, our model projects the stock will rise to $23.52 within 1.9 years. This assumes a 12.9x price-to-earnings multiple.
That represents compression from Upwork’s historical P/E averages of 12.9x (one year) and 88.2x (five years).
The lower multiple acknowledges integration risks from recent acquisitions and conservative positioning ahead of the enterprise ramp.
The real value lies in the company’s three growth building blocks: AI tailwinds, SMB expansion through Business Plus, and enterprise market access through Lifted.
Management expects these drivers to accelerate GSV growth to 7-9% CAGR through 2028.
Our Valuation Assumptions
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for UPWK stock:
1. Revenue Growth: 7.1%
Upwork’s growth centers on platform transformation and market expansion. The company delivered 2% GSV growth in Q3 after five quarters of declines, with management guiding for continued acceleration into 2026.
AI categories are expanding by over 50% year over year. Clients engaging in AI work spend 3.5x more than typical platform users. Business Plus subscribers spend 2.5x the average marketplace client and are growing rapidly from a low base of penetration.
The Lifted subsidiary opens access to employer of record, temp staffing, and other contract types that previously required partners. Management expects 25% GSV growth from the enterprise in 2026, with meaningful scale in 2027.
2. Operating margins: 26.8%
Upwork is sustaining strong profitability while investing in growth. The company delivered an adjusted EBITDA margin of 29.6% in Q3, its highest quarterly performance. Management targets 35% long-term margins.
Recent acquisitions of Ascen and Bubty will create near-term margin dilution as the Lifted business scales. However, the company has demonstrated consistent margin expansion, growing net income by approximately 6 percentage points in 2025 alone.
3. Exit P/E Multiple: 12.9x
The market currently values Upwork at 14.7x earnings. We assume the P/E will compress modestly to 12.9x over our forecast period.
Near-term execution risk from enterprise integration and the challenge of proving AI’s impact on the business model weigh on the multiple.
The market remains skeptical about AI’s net effect on labor platforms, despite management’s evidence that AI creates more work than it displaces.
As Upwork demonstrates continued GSV acceleration and successful enterprise scaling, the company should maintain its current valuation range. The marketplace model, with 85% recurring client GSV, provides stability that supports a premium valuation.
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What Happens If Things Go Better or Worse?
The freelance platform sector faces technology adoption curves and spending cycles. Here’s how Upwork stock might perform under different scenarios through December 2027:
- Low Case: If revenue growth slows to 7.8% and net income margins compress to 22.6%, investors still see a 11.5% total return (2.8% annually).
- Mid Case: With 8.7% growth and 24.4% margins, we expect a total return of 40.4% (9.0% annually).
- High Case: If AI acceleration and enterprise traction drive 9.6% growth while maintaining 25.9% margins, returns could hit 72.2% total (14.9% annually).
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The range reflects execution on Business Plus penetration, successful Lifted customer acquisition, and the net impact of AI on platform economics.
In the low case, AI substitution affects more categories than expected, or enterprise sales cycles extend beyond projections.
In the high case, the virtuous cycle of AI-enabled talent attracting more clients accelerates faster than anticipated, while Business Plus achieves double-digit platform penetration ahead of schedule.
How Much Upside Does Upwork Stock Have From Here?
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All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
