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E-learning a Rising Trend Amid Coronavirus Crisis: 3 Stocks

Sriparna Ghosal
E-learning a Rising Trend Amid Coronavirus Crisis: 3 Stocks

The coronavirus pandemic continues to cast a pall over the global stock market. Per a report by Fitch Ratings, the world economy is expected to decline 1.9% in 2020, with the U.S., eurozone and U.K. GDP declining 3.3%, 4.2% and 3.9%, respectively. Within the United States, most companies across multiple industries have started to suffer the adversities of the public health crisis. This has led to the slashing of their first-quarter guidance owing to apprehensions of substantial revenue losses.

However, the technology industry has been gaining momentum in the wake of the pandemic, banking on the surge in several trends like that of e-learning. In this regard, Goldman Sachs recently wanted to attract investors’ attention toe-learning service and technology provider -- London-based Learning Technologies Group. The U.S. Investment bank expects this company’s shares to see around a 50% rise over the next 12 months as the e-learning market grows (published in Proactive Investors). It is time for us to wake up to the latest sea of change in education system --home-based learning.

Let’s delve deeper.

As schools, universities as well as other learning institutes have shut down for an indefinite time period, the future of millions of students has plunged into grim uncertainty. The online education sector has lately been cashing in on this opportunity.Virtual delivery of education has become the need of the hour now and is unlikely to see any drop in demand even after the crisis dissipates.In this regard, per ResearchAndMarkets.com, the global e-learning market is projected to reach a worth of $238 billion by 2024, at a CAGR of 8.5% during 2019-2024.

 

In such a scenario, video conferencing platforms like Zoom and WebEx as well as learning management software-based systems like Infrastructure’s Canvas, Blackboard and Google Classroom have been gaining immense traction. Moreover, enabling software like Proctorio, a Google chrome extension which helps students take online exams, has also become popular.

Meanwhile, corporate learning stocks are expected to advantage from this unprecedented scenario. Alphabet Inc. GOOG has launched resource pages to facilitate instructors in continuing educating students at home.The page provides recommendations on how educators can teach remotely by using Google products. At the moment, the page features ideas like doing a video call with a class using Hangouts or generating an online quiz using Google Forms.

3 Stocks in Focus

Here are three Zacks Rank #2 (Buy) and 3 (Hold) companies which have been performing well on account of the launch of several e-learning methods and tools.You can see the complete list of today’s Zacks #1 Rank (Strong buy) stocks here.

Strategic Education STRA: In a bid to mitigate campus closures and education disruption due to coronavirus, this Zacks Rank #2 company has announced to offer free courses online to universities, school districts, employers and the general public. With the help of its subsidiary — Sophia Learning online education platform — SEI aims to offer students affordable and flexible education system to explore new career avenues with various professional development courses.All the education courses available on Sophia Learning platform are recommended by the American Council on Education (“ACE”) and are transferrable to various higher education institutions for course credit.

In the past three months, the company’s shares have outperformed S&P 500 index. The stock has lost 17.4% compared with the index’s 18.3% decline.

Chegg CHGG: This Zacks Rank #2 CA-based leading textbook sales and rental company has diversified extensively into the space of online education study materials and services.The company has seen a surge in its targeted consumer base amid the pandemic.

In the past three months, the company’s shares have outperformed the broader industry. The stock has lost 8.4% compared with the industry’s 16% decline.

Microsoft MSFT: This Zacks Rank #3 company’s premier e-learning provider Bigger Brains has been launching key initiatives to facilitate remote learning.Its popular learning app, Brainbot, is being offered to teachers for a limited time to enable the delivery of workflow training and training reinforcement through Microsoft Teams, Slack, Facebook and email.

In the past three months, the company’s stock has outperformed its broader industry. The stock has gained 2.3% against the industry’s 5.6% decline.

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Click to get this free report Microsoft Corporation (MSFT) : Free Stock Analysis Report Strategic Education Inc. (STRA) : Free Stock Analysis Report Alphabet Inc. (GOOG) : Free Stock Analysis Report Chegg, Inc. (CHGG) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research