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What's in Store for Work-From-Home ETF & Stock Earnings?

Sanghamitra Saha

With a number of countries under lockdowns to contain the spread of the coronavirus, the trend of working from home (WFH) has picked up. The successful execution of the WFH policy suggests that the trend is going to be a new normal over a long haul.

Some specific industries have benefited from this trend, according to the Solactive Flexible Office Index. These industries are Cloud Technologies, Cybersecurity, Online Project , Document Management and Remote Communications (read: Rising Work-From-Home Trend to Boost 5 Industries & ETFs).

Since these industries and their stocks have been the beneficiaries of the coronavirus outbreak, investors must be interested in knowing what’s in store for them this earnings season.

Let’s take a look.

Cloud Computing

Cloud was an emerging concept even before the virus-led lockdown as companies were discarding their own servers and shifting to the cost-effective renting model, giving huge businesses to mega cloud owners like Amazon AMZN and Microsoft MSFT.

In fact, Microsoft has “seen a 775 percent increase in Teams' calling and meeting monthly users in a one-month period in Italy, where social distancing or shelter in place orders have been enforced," per pcmag.com.

Zacks Rank #3 (Hold) Amazon and Microsoft are likely to report on Apr 30 and Apr 29, respectively. Amazon and Microsoft have a negative Earnings ESP of 1.67% and 1.42%, respectively. Negative ESP suggests that analysts have recently become slightly bearish on the company's earnings prospects.

Investors may thus have a close look on Microsoft-heavy ETF Select Sector SPDR Technology ETF XLK and Amazon-heavy ETF ProShares Online Retail ETF ONLN.

Cyber Security

The rampant usage of Internet has raised the risk of cyber threats.In case of work from home, proprietary business data is being accessed from personal computers and laptops that may not have the same level of security as in-office setups.

Zacks Rank #3 Fortinet Inc. FTNT and Rank #2 Okta Inc. OKTA are likely to report on May 6 and Jun 4, respectively. While FTNT has a negative ESP of 2.97%, Okta’s ESP is +5.17%. In March, another stock CrowdStrike CRWD reported earnings and bested guidance expectations.

Fortinet-and-Okta-heavy ETF Global X Cybersecurity ETF BUG and iShares Cybersecurity and Tech ETF IHAK are thus up for a moderately good performance ahead (read: Cyber Security ETFs to Thrive in the Virus-Hit Economy).

Online Project and Document Management

Upland Software Inc. UPLD and BOX Inc. BOX fall in this category and are expected to report respectively on May 7 and Jun 1. The Zacks Rank #3 stocks have Earnings ESP of +0.39% and +13.51%, respectively. BOX has slight exposure to AI Powered Equity ETF AIEQ.

Remote Communications

Companies like Zoom Video Communications Inc. ZM and RingCentral RNG) operate in this segment. Zacks Rank #3 RingCentral and Zacks Rank #1 (Strong Buy) Zoom are likely to report next on May 6 and Jun 4, respectively. Zoom and RingCentral have negative ESP of 5.56% and positive 3.96%, respectively.

RingCentral has about 4.5% focus on Invesco DWA Technology Momentum ETF PTF and Zoom has 3% exposure to WisdomTree Cloud Computing Fund WCLD.

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Microsoft Corporation (MSFT) : Free Stock Analysis Report
 
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
Technology Select Sector SPDR ETF (XLK): ETF Research Reports
 
Fortinet, Inc. (FTNT) : Free Stock Analysis Report
 
Ringcentral, Inc. (RNG) : Free Stock Analysis Report
 
Invesco DWA Technology Momentum ETF (PTF): ETF Research Reports
 
Box, Inc. (BOX) : Free Stock Analysis Report
 
Upland Software, Inc. (UPLD) : Free Stock Analysis Report
 
AI Powered Equity ETF (AIEQ): ETF Research Reports
 
Okta, Inc. (OKTA) : Free Stock Analysis Report
 
ProShares Online Retail ETF (ONLN): ETF Research Reports
 
Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report
 
CrowdStrike Holdings Inc. (CRWD) : Free Stock Analysis Report
 
iShares Cybersecurity and Tech ETF (IHAK): ETF Research Reports
 
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