38.75 +0.37 (0.96%)
After hours: 7:59PM EDT
|Bid||38.70 x 1000|
|Ask||38.88 x 800|
|Day's Range||36.18 - 38.90|
|52 Week Range||15.10 - 42.00|
|Beta (5Y Monthly)||N/A|
|PE Ratio (TTM)||N/A|
|Earnings Date||Jun 04, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||28.15|
The CNBC host and former hedge-fund manager recommends these ‘stay-at-home’ stocks and warns of ‘huge second wave.’
The number of Americans with confirmed case of the coronavirus that causes COVID-19 climbed above 1.8 million on Tuesday, amid concerns that protests about the death of George Floyd last week, and people gathering in groups as lockdowns are lifted, will spark a fresh wave of infections.
The COVID-19 outbreak brought waves of new users to Zoom Video Communications Inc. and Slack Technologies Inc., but this week we find out how many are actually paying for the services, and how much it is costing the companies to support them.
Slack shares have surged over 65% in 2020, against its industry's 5% decline. WORK stock jumped another 6% Monday. This means that investors might expect the coronavirus standout's Q1 financial results to impress....
You've probably heard the saying that in every crisis lies a great opportunity. For Zoom Video Communications (NASDAQ: ZM), and Slack Technologies (NYSE: WORK), opportunity seems to have come this year in the unlikely form of a global pandemic. This week, both report earnings. The "Great Lockdown" may have decimated employment across most of the working world, but it also accelerated the groundwork for a new type of economic reality: Let's call it the "stay-at-home" economy. This new economy is all about virtualization--people working from home, educational institutions offering classes online, and fitness classes going online. And companies like ZM and WORK are arguably in a position to help power up the new virtual world and find themselves in the spotlight. ZM is a video conferencing platform designed for large meetings; up to 100 people can gather on the same screen. WORK is a channel-based instant messaging platform that allows communications to be focused on specific projects or groups. It's designed to replace the traditional and clunky system of group emails. Both may have benefited immensely from the lockdown as people, businesses, and schools relied on their platforms to go about their day-to-day operations. We'll find out more as ZM reports Q1 earnings Tuesday after the close and WORK reports Thursday after the close. Something to think about as the world gradually reopens is if the heightened demand for virtualization will last. These companies' platforms might end up as supplements to office-bound work, or they may actually redefine the future of the workspace. Investors might want to listen carefully to the companies' respective earnings calls for the chance to learn more about how they plan to position themselves if the economy returns to normal. There's a debate right now about how much of the world stays in remote work once the pandemic fades. Some companies say they could continue to keep many employees at home, as they've seen the benefit of that during the lockdown. This could play to ZM and WORK's advantage.Slack and Zoom's Performance to Date Let's take a few steps back and look at how both companies have done. Year to date, WORK advanced roughly 53%, while ZM staged an impressive rally of 144%. As the broader market tumbled during the COVID-19 plunge, WORK experienced a steep slide but sharply recovered. ZM had a slight pullback but generally bucked the overall trend. Toward the end of March, both stocks were outperforming the S&P 500 Index (SPX). Since the selloff, ZM has gone on to hit record highs (see figure below).FIGURE 1: ZOOMING ALONG. ZM has been playing off the strength of the stay-at-home economy during the pandemic. Since the coronavirus selloff, Zoom (ZM-candlestick) has outperformed the S&P 500 Index (SPX-purple line). Data source: Nasdaq, S&P Dow Jones Indices. Chart source: The thinkorswim® platform from TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results.It's reasonable for investors to speculate that WORK and ZM shares may have advanced on hopes that increased demand for their virtual communications platforms might boost Q1 earnings. Also, both companies topped (to varying degrees) analyst expectations during their Q4 reporting dates, which happened in mid-March amid the early weeks of the COVID-19 crash. Both companies saw a surge in platform adoption in their respective fourth quarters for the fiscal quarters ended Jan. 31. Slack's CEO Stewart Butterfield noted "exceptional growth at the high end" (of customers) in their final quarter of the old fiscal year. Zoom's CFO Kelly Steckelberg mentioned that its "new customers account for approximately 59% of [the company's] year-over-year growth in subscription revenue."One thing to keep in mind is that these results, which suggest a growth trend in product adoption, reflect what happened before the COVID-19 pandemic--in other words, before "shelter-at-home" orders were in place. The pandemic didn't really hit the global economy beyond China until February, after the companies recorded their fiscal Q4 results.The coming Q1 earnings--which reflect the months of February through April-- may show how much each company grew once the stay-at-home economy kicked in; when "supplemental" platforms became an absolute need. But if the lockdown turns out to be a fundamental growth driver for Slack and Zoom, it'll be interesting to see how sustainable that growth is once economies reopen.Change Agent or Accelerant for the Virtual Workspace? Sustainability of demand was something that was brought up frequently in Q4 conference calls for both companies.Listening to the CEO responses, you might get a sense that they see the pandemic not so much as a "change agent" but as an "accelerant'' to an existing trend. In other words, COVID-19 didn't cause the stay-at-home economy, it just helped speed it up. And if they're right, it means that the remote workspace isn't going away any time soon. "I don't think that's temporary," said Zoom CEO Eric Yuan, in response to an analyst's question regarding the platform's sustainability post-lockdown. Yuan noted several companies in Silicon Valley that "do not have a single physical office," saying that virtual "video [conferencing] is the future of communication." Slack's CEO, Stewart Butterfield, believes that platform adoption is benefitting from both a "short-term interest spike," and a "longer-term shift," describing the "lingering effects" of the pandemic. "Organizations who previously had been really resistant to distributed workforces are probably going to open up a little bit," said Butterfield. If the future they envision is in line with their projections, then we may likely get a glimpse of the outcome, maybe not necessarily in the coming quarter, but toward the end of each company's fiscal year.What Investors Might Watch Out For Despite Slack's year over year revenue growth of 49% to $181.9 million in fiscal Q4, it had a net loss of four cents a share. Granted, Slack is a relative newcomer. And like many newcomers, the cost of services and expansion can often offset revenue. That said, it may be important to view the company in light of the COVID-19 and post-COVID-19 worlds. Slack CEO Butterfield frequently called out Microsoft Corporation's (NASDAQ: MSFT) communication and collaboration platform Microsoft Teams as a direct rival during the last call. So, it'll be interesting to see where customers go once the world emerges from its great pause. In contrast, Zoom reported a net profit of $21.7 million last quarter from a revenue of $622.7 million, both topping analyst expectations. Its revenue growth stood at 78% year over year.Looking forward, Zoom faces competition against rivals such as MSFT's Teams and Cisco Systems' (NASDAQ: CSCO) Webex. In late March, early April, some institutions discontinued Zoom adoption due to a few security missteps, prompting concerns that the company may not have the means to scale-up to meet demand. So far, that appears to be an isolated event. A Blip, or a Paradigm Shift? If the COVID-19 signals a paradigm shift in the idea of the workspace, then Slack and Zoom's prospects moving forward may change quite quickly and drastically. There are a lot of competitors in the arena. However, if both companies can maintain the same momentum they gathered during the recent lockdown, then staying relevant in the remote workplace will be a matter of continual innovation, prudent decision making, and competitiveness. Keep in mind, too, that shares of both companies fell immediately after their last earnings reports. Obviously, past performance doesn't guarantee anything in the future. However, if investors find their guidance disappointing, the companies might get punished in the market. That's what happened to WORK last time out. ZM is expected to report adjusted EPS of $0.09, down from $0.15 in Q4 2019. Revenue is projected at $202.04 million, up 80.9% from a year ago.The options market has priced in an expected share price move of 11% in either direction around the earnings release, according to the Market Maker Move™ indicator on the thinkorswim® platform.Looking at the June 5 options expiration, call activity is heaviest at the 200 strike. Put activity sees more concentration at the 165 and 170 strikes. The implied volatility sits at the 69th percentile as of Monday morning.Note: Call options represent the right, but not the obligation, to buy the underlying security at a predetermined price over a set period of time. Put options represent the right, but not the obligation, to sell the underlying security at a predetermined price over a set period of time. WORK is expected to report adjusted EPS of -$0.06, down from -$0.04 in Q4 2019, according to third-party consensus analyst estimates. Revenue is projected at $187.65 million, up 39.2% from a year ago. The options market has priced in an expected share price move of 10.6% in either direction around the earnings release, according to the Market Maker Move indicator on the thinkorswim platform. Looking at the June 5 options expiration, call activity is highest at the 37 and 40 strikes. Put activity is more scattered with concentrations at the 30 to 31.5 strikes. TD Ameritrade® commentary for educational purposes only. Member SIPC. Options involve risks and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options.See more from Benzinga * Manufacturing Checkup: Fresh Data To Start Week As Market Deals With U.S. Unrest, China Concerns * Costco Shares Come Under Pressure Despite Strong Earnings, Same-Store Sales * Costco Earnings On Tap After Close As Investors Mull Strong Toll Brothers Results(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
On Tuesday, Cowen analysts led by Derrick Wood initiated coverage of Slack with an outperform rating and a $45 price target, as it thinks COVID-19 and the shift to remote work will act as a major catalyst to accelerate adoption. The Final Round panel discusses.
A look at three cloud-focused stocks, Cloudera, DocuSign, and Slack, which have been coronavirus stay-at-home standouts, ahead of their upcoming earnings releases...
The shift to the work-from-home model amid the pandemic has given a boost to Slack Technologies Inc's (NYSE: WORK) value proposition and market opportunity, according to Cowen.The Slack AnalystCowen's Derrick Wood initiated coverage of Slack with an Outperform rating and a price target of $45.The Slack ThesisThe remote work trend is likely to have "some level of permanency," which boosts Slack's total addressable market and enhances the value proposition of its software from nice-to-have to a must-have, Wood said in the note.He added that the market seems to be underappreciating Slack's potential, focusing too much on the threat from Microsoft Corporation's (NASDAQ: MSFT) competing Teams product.The analyst believes that as digital collaboration becomes increasingly strategic and mission critical for companies working in a distributed workforce environment, demand will "gravitate toward best-of-breed."Slack has a "low-touch, self-service" model for generating most of its new customers, which is supported by a direct sales team to drive expansion and by customer success teams to drive use-case expansion from the installed base. As a result, the company enjoys retention rates of over 130%, Wood noted.He expects a re-rating of the stock following strong results, which are scheduled to be released Thursday.WORK Price ActionShares of Slack were trading higher by 1.8% to $37.84 at the time of publication Tuesday.Related Links:13 Technology Stocks Moving In Tuesday's Pre-Market SessionSlack, Zoom, And The "Stay At Home" Economy--Q1 Earnings PreviewLatest Ratings for WORK DateFirmActionFromTo Jun 2020Cowen & Co.Initiates Coverage OnOutperform May 2020Morgan StanleyMaintainsEqual-Weight Apr 2020Credit SuisseMaintainsNeutral View More Analyst Ratings for WORK View the Latest Analyst Ratings See more from Benzinga * Alibaba Plans Massive Cloud Investment, Wedbush Sees 'Key Turning Point'(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
The communications software company, which has benefited from the shift to working from home, picks up a new analyst recommendation.
Looking into the current session, Slack Technologies Inc. (NYSE: WORK) shares are trading at $38.18, after a 2.68% spike. Moreover, over the past month, the stock increased by 39.83%, but in the past year, decreased by 1.19%. Shareholders might be interested in knowing whether the stock is undervalued, even if the company is performing up to par in the current session.The stock is currently higher from its 52 week low by 152.83%. Assuming that all other factors are held constant, this could present itself as an opportunity for investors trying to diversify their portfolio with application software stocks, and capitalize on the lower share price observed over the year.The P/E ratio measures the current share price to the company's EPS. It is used by long-term investors to analyze the company's current performance against its past earnings, historical data and aggregate market data for the industry or the indices, such as S&P 500. A higher P/E indicates that investors expect the company to perform better in the future, and the stock is probably overvalued, but not necessarily. It also shows that investors are willing to pay a higher share price currently, because they expect the company to perform better in the upcoming quarters. This leads investors to also remain optimistic about rising dividends in the future.Most often, an industry will prevail in a particular phase of a business cycle, than other industries.Slack Technologies has a lower P/E than the aggregate P/E of 44.64 of the application software industry. Ideally, one might believe that they might perform worse than its peers, but it's also probable that the stock is undervalued.There are many limitations to price to earnings ratio. It is sometimes difficult to determine the nature of the earnings makeup of a company. Shareholders might not get what they're looking for, from trailing earnings.See more from Benzinga * Benzinga's Top Upgrades, Downgrades For June 2, 2020 * 13 Technology Stocks Moving In Tuesday's Pre-Market Session(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
As riots and protests break out throughout the country, companies like Nike, Apple and Amazon have expressed their support in those protesting racial inequality. Yahoo FInance’s Melody Hahm joins The Final Round panel to discuss.
Stocks jumped last week, as investors celebrated the resumption of more normal activity across big parts of the economy. Both the Dow Jones Industrial Average (DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) gained over 3%, which put the S&P at just a 6% decline so far in 2020, while the Dow is lower by 11%. A few big-name stocks will announce earnings results over the next few trading days, including Ambarella (NASDAQ: AMBA), Slack Technologies (NYSE: WORK), and Zoom Video Communications (NASDAQ: ZM).
It will be a big week for U.S. economic data with the release of the May jobs report and the Institute for Supply Management’s manufacturing index.
If you rebuild the workplace after COVID-19, will the workers ever come back? In Silicon Valley, the answer from many tech companies is that many won’t, and maybe that is a good thing.
Editor's note: InvestorPlace's Earnings Reports to Watch is updated weekly. Please check back next week for our latest earnings picks.Once again, U.S. stocks are rallying, with the S&P 500 up over 2% in this shortened week and the Dow Jones Industrial Average gaining almost twice as much. And once again, corporate earnings reports don't seem to be much of a driver.As has been the case for most of this earnings season, investor reaction to earnings reports themselves has been rather muted. There were a couple of exceptions. StoneCo (NASDAQ:STNE) soared 27% on Wednesday after a blowout Q1 report. HP Inc. (NYSE:HPQ) fell 12% the following day on soft guidance.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut among major names, investors mostly shrugged. Dollar General (NYSE:DG) posted same-store sales growth over 20% and its stock still dropped over 1%.Investors seem to be looking past near-term earnings. That may change next week, as a number of companies with short-term pandemic tailwinds take center stage.After all, the market rally off March lows has come as the market looks forward to better days. For many of these companies, however, the good times should have arrived already. And that could set up some potential declines if results fall short of expectations -- or even if investors take the opportunity to sell the news.Here are the seven key earnings reports to watch in what should be an interesting week: * 7 Red-Hot Vaccine Stocks Racing to Develop a Coronavirus Cure * Zoom Video Communications (NASDAQ:ZM) * CrowdStrike (NASDAQ:CRWD) * Campbell Soup (NYSE:CPB) * Broadcom (NASDAQ:AVGO) * DocuSign (NASDAQ:DOCU) * MongoDB (NASDAQ:MDB) * Slack Technologies (NYSE:WORK) Zoom VideoSource: Michael Vi / Shutterstock.com Earnings Report Date: Tuesday, June 2, after market closeOne of the market's biggest "pandemic plays" gets its first big test on Tuesday afternoon. Among large-cap stocks, Zoom Video has been the third-best performer so far in 2020, rising 140%. Only DraftKings (NASDAQ:DKNG) and vaccine developer Moderna (NASDAQ:MRNA) have done better.But ZM stock has pulled back a bit in recent sessions, part of a broader rotation out of short-term winners. And that sets up an interesting fiscal first quarter release.After all, expectations are going to be sky-high. Zoom already has disclosed that its usage soared from 10 million daily participants in December to over 300 million in March.The questions are: How many of those users are paying? And how many will stick around as normalcy returns? With ZM trading at a staggering 74x trailing twelve-month revenue, Zoom needs to offer impressive answers on Tuesday. CrowdStrikeSource: Piotr Swat / Shutterstock.com Earnings Report Date: Tuesday, June 2, after market closeCrowdStrike stock is another 2020 winner, gaining 59% year-to-date. As with Zoom, the pandemic is seen as a positive catalyst, as enterprises look to manage the security risks created by employees working from home.Unlike Zoom stock, however, CRWD still sits below all-time highs reached last year. Valuation certainly is stretched, at 34x revenue. But a potentially transformative company in the growing cybersecurity space could see that valuation expand if optimism continues to grow.A big report on Tuesday along with strong guidance, would seem to be a step in that direction. But it's worth considering the trading in fellow cybersecurity play Okta (NASDAQ:OKTA) on Thursday afternoon. * 7 Cheap Stocks to Buy With Great Potential That company handily beat analyst estimates and gave an above-consensus outlook. Shares dropped 1.6% in the after-hours session. It may take a monster quarter from CrowdStrike to extend the rally. As OKTA shows, even that might not be enough. Campbell SoupSource: HeinzTeh / Shutterstock.com Earnings Report Date: Wednesday, June 3, before market openBefore the pandemic hit, Campbell Soup stock had traded sideways for about five months, trading mostly between $46 and $48. The last three months have seen enhanced volatility, but after all that movement, CPB still sits at $49 ahead of earnings next week.Clearly, there's still a "wait and see" approach from the market as Campbell executes a pivot into faster-growing categories like snacks and organic foods. But Wednesday morning's fiscal third quarter release might finally break the range.After all, consumer stocking and shuttered restaurants drove higher grocery sales in the quarter. Kroger (NYSE:KR) posted same-store sales growth of 30% in March. Campbell needs to show that it was able to capture some of that growth. Investors may not get a better quarter with which to judge the success of Campbell's transformation.With fellow packaged food play J.M. Smucker (NYSE:SJM) reporting on Thursday morning, it's an interesting week for the sector as well. We haven't seen too many key reports from the industry since late April. Will investors still buy these defensive names in a more aggressive market that's looking to a more normal economy? BroadcomSource: Sasima / Shutterstock.com Earnings Report Date: Thursday, June 4, after market closeSemiconductor stocks have held up reasonably well so far in 2020. Widely-held names like Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD), and Intel (NASDAQ:INTC) sit not far from their highs. The Philadelphia Semiconductor Index is down just 2% year-to-date.Broadcom hasn't fared quite as well, with a 10% YTD decline. A strong fiscal Q2 report on Thursday could inspire confidence and allow AVGO to join peers in challenging past highs.But it's also a big report for the sector. Chief executive officer Hock Tan is widely respected, and his commentary on demand can move other chip names. For instance, chip stocks began rallying in early October, just weeks after Tan called a bottom in the business after his company's Q3 report.Meanwhile, Broadcom's reach is, well, broader than that of many other large-cap names. Its results could signal wider trends in tech as enterprises respond to the pandemic. * 25 Stocks to Buy for the Reopening Rally Broadcom earnings often don't get the headlines accorded other chip giants. But its reports should be required reading for investors in any environment, particularly this one. MongoDBSource: Shutterstock Earnings Report Date: Thursday, June 4, after market closeYet another enterprise software provider with a sky-high valuation reports next week, as MongoDB releases first quarter results. Shares of the database platform operator aren't quite as expensive as ZM or CRWD, but at 28x sales are hardly cheap. A 64% gain YTD raises concerns about expectations.But MDB is a more 'under the radar' play than those larger software plays. And the tailwinds behind the company aren't quite as clear, or perhaps as stiff, as those benefiting CrowdStrike and Zoom. As a test for broader worries about valuation in software, MDB might be more useful than the better-known companies reporting earlier in the week. Slack TechnologiesSource: Sundry Photography / Shutterstock.com Earnings Report Date: Thursday, June 4, after market closeTwo more pandemic plays report on Thursday afternoon. For Slack, the fiscal Q1 report seems like a huge opportunity.'Work from home' should be a tailwind for Slack as much as Zoom. Both companies are useful in connecting remote employees, and should benefit from what increasingly looks like a secular trend. * 7 Top-Tier Dividend Stocks for 2020 Yet while WORK has doubled from March lows, the stock is up 'only' 44% so far this year, and sits about even to August levels. A big report could continue the rally and lead WORK to the kind of breakout to new highs that ZM and CRWD have seen. DocuSignSource: Sundry Photography / Shutterstock.com Earnings Report Date: Thursday, June 4, after market closeDocuSign is yet another software play reporting next week with a huge valuation and a secular tailwind. Adoption no doubt has picked up amid closed offices and shut-in consumers. Presumably, once users move to e-signatures from paper copies, they don't return.But DocuSign may have less room for error than other software plays, even if a 24x revenue multiple makes valuation more reasonable (at least in context). The company faces a tough competitor in Adobe (NASDAQ:ADBE), who can leverage its existing user base for its Adobe Sign. And DocuSign still needs to prove it can drive the incremental margins for which investors are paying so dearly at the moment.As with so many earnings reports next week, this seems like a crucial test for DocuSign itself. The sheer number of high-multiple, high-growth companies releasing earnings reports makes the week a crucial test for a market trying to claw back to past levels. Vince Martin has covered the financial industry for close to a decade for InvestorPlace.com and other outlets. He has a short position in Zoom Video, and no positions in any other securities mentioned. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * America's Richest ZIP Code Holds Shocking Secret * 1 Under-the-Radar 5G Stock to Buy Now * The 1 Stock All Retirees Must Own The post 7 Earnings Reports to Watch Next Week appeared first on InvestorPlace.
Slack (WORK) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
Slack Technologies (WORK) closed the most recent trading day at $32.11, moving -0.93% from the previous trading session.
Now investors should look ahead to the post-vaccine world: Sell stocks that are hot today but will experience deteriorating earnings momentum after a vaccine comes out and buy quality stocks with good balance sheets that will experience positive earnings momentum in that new era. This chart compares the Dow Jones Industrial Average ETF (DIA) to seven stocks that I am using to illustrate shifts in money flows. • Zoom Video (ZM) has been one of the biggest beneficiaries of coronavirus.
SaaS companies Shopify (NYSE: SHOP) and Slack Technologies (NYSE: WORK) have both attracted a huge customer following and are investing heavily to grow, but the software offerings couldn't be more different. Shopify makes it easy to run e-commerce stores, and Slack is a messaging platform that is out to make email obsolete. Shopify's stock has been on a tear since its IPO and has likely made many shareholders millionaires.
Zoom Video and Netflix have soared while travel and restaurant companies have tumbled. However, new data from PivotalPath, a hedge-fund research and intelligence firm, show that funds are tiring of the trade.