Most investors would jump at the chance to earn a 39% return on a heavily undervalued title. One pundit believes that's very much the case with low-priced freelance gig marketplace Fiverr International (FVRR 0.68%).

A bull liked the beats

That stampeding Fiverr bull is Needham analyst Bernie McTernan, who raised his price target on the company just after it unveiled Q1 earnings. McTernan set a price target of $36 per share, a jump from the previous $33 target. The price implies a 39% upside over the next 12 months. He maintained his buy recommendation.

While some first-quarter fundamentals weren't mind-blowingly impressive, Fiverr did post meaningful net income growth and notch a double beat on analyst expectations. For the period, the company managed revenue growth of 6% year over year (to $93.5 million), despite a slight drop in the active buyers essential for its business. Non-GAAP (adjusted) net income soared 48% higher to nearly $22 million.

In his latest Fiverr note, McTernan pointed to the company's gross merchandise value, which grew in the quarter after 11 straight quarters of decreases. He said this was due to a double-digit rise in the company's complex services category, which to him "should help to calm generative artificial intelligence (AI) competition fears."

AI worries overblown

With that, the analyst shone a light on perhaps the biggest fear of Fiverr bears -- that AI will wipe out the marketplace for small-scale freelance work that is the site's specialty. After all, a good AI program can write you an essay on Abraham Lincoln, right?

Well, not exactly. These days, even for uncomplicated projects, AI often turns out work that's clunky and rough. Humans with talent are still needed for anything that approaches the professional level. Additionally, what kind of jobs are proving to be popular on Fiverr these days? It's those that require a human to work with, fix, or otherwise improve AI functionalities.

I think this company is more durable and has more potential than many give it credit for. It feels like a bargain at its current price.