Several companies bore the brunt of the coronavirus-led economic shutdown while only a few flourished. And comprehensibly, the biggest gainers have been the so-called work-from-home or WFH stocks. Notably, many companies involved in video conferencing and cloud storage have seen their shares outpace the broader market so far this year, in some cases doubling or even tripling.
And many experts now opine that the work-from-home trend is poised to continue since there’s no telling how long the pandemic will last. Thanks to the current reopening process, there has been an unabated increase in coronavirus cases in nearly 30 American states. Johns Hopkins University added that the seven-day average for coronavirus cases is currently higher than the 14-day average, an indication that the virus spread is intensifying.
Nonetheless, the work-from-home trend that began as a momentary way to keep employees safe is now becoming a permanent initiative for large companies like Facebook, Mondelez and Barclays, who see remote working as a way to curtail office rents and tap talent pool. The Gartner Survey recently reported that almost 75% of companies plan to allow employees to work remotely, while the Gallup poll shows that 60% of employees are interested in working from home despite the restrictions being eased.
Hence, investors should look to tap companies that are thriving with employees at home. These stocks are also in a good shape to survive the pandemic. Take a look –
Cybersecurity Provider Fortinet
California-based Fortinet Inc. FTNT is one of the leading providers of VPN services, which are required for remote work. Fortinet also provides Next Generation Firewall services, which are of utmost importance since home networks and personal devices are not more secure than office networks.
The stock price of Fortinet has increased 37.4% year to date. Additionally, its expected earnings growth rate for the current year is 13.8% in contrast to the Security industry’s projected decline of 15.1%.
Meanwhile, the Zacks Consensus Estimate for its current-year earnings has risen 2.2% over the past 60 days. Fortinet currently has a Zacks Rank #1 (Strong Buy) and a Growth Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
Infrastructure Software Provider Fastly
As majority of people continue to work from home, most companies need to move a bulk portion of their workloads to the cloud and provide the required Internet speed. Fastly, Inc. FSLY, as the name signifies, helps companies improve Internet speed via content delivery network (CDN). Its edge cloud platform also stands in good stead for companies that let their employees work from home.
It’s one of the best-performing stocks so far this year. After all, its shares have jumped 380.9% year to date.
But does that mean investors have missed the boat? Certainly not! Its expected earnings growth rate for the current quarter is 55.7%. And the Zacks Consensus Estimate for its current-year earnings has moved up 69% over the past 90 days. Fastly currently flaunts a Zacks Rank #2 (Buy).
Medical Service Provider Teladoc
Telehealth service provider Teladoc Health, Inc. TDOC helps physicians connect with their patients via its secure online platform. The company has seen an unprecedented rise in patient visits, who continue to consult a doctor while maintaining social distancing. It has been a great platform for doctors to work from home, with total patient visits soaring 92% during the March quarter to 2 million.
The company has immense growth potential. So far, it has addressed 1.1 billion patients worldwide, which is a meager 1% of the entire market. Teladoc currently has a Zacks Rank 2. The Zacks Consensus Estimate for its current-year earnings has risen 1.8% over the past 60 days.
The company’s expected earnings growth rate for the current quarter is 35.9%. So far this year, its shares have surged 168.2%.
Technology Service Provider DocuSign
DocuSign Inc. DOCU is the pioneer in e-signatures, which help users electronically sign documents from anywhere across the globe and from virtually any device. Hundreds of millions of users from more than 180 countries are now using DocuSign software to sign official and various other documents amid the pandemic.
In its April quarter, its overall customer base improved 30% to 661,000 subscribers compared to the year-ago period, boosting revenues by 39%. To top it, its acquisition of Seal Software should help DocuSign bring AI to its products and make its online platform smarter.
DocuSign currently has a Zacks Rank 2. The company’s expected earnings growth rate for the current year is 48.4% compared with the Technology Services industry’s projected increase of 9.5%. So far this year, its shares have climbed 178.5%.
Video Conferencing Platform Provider Zoom
The stay-at-home trend is a blessing in disguise for videoconferencing platform provider Zoom Video Communications, Inc. ZM. In recent times, Zoom Video’s ZM paid subscriber growth for the video conferencing service has improved and CEO Eric Yuan said that the Zoom platform has been able to provide “an incredibly valuable service to our beloved users” amid the coronavirus-induced stay-at-home scenario.
As many as 200 million users are now logging on each day, way more the 10-million daily users on average before the pandemic. Zoom, in fact, now is the No 1 video conferencing provider in the United States with an almost 43% share.
Zoom currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has advanced 6.3% over the past 30 days.
The company’s expected earnings growth rate for the current year is 240% compared with the Internet – Software industry’s estimated rise of 4.1%. The stock price of Zoom has increased 291.4% year to date.
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Fortinet, Inc. (FTNT) : Free Stock Analysis Report
Teladoc Health, Inc. (TDOC) : Free Stock Analysis Report
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