Many of us are now working from home much to the benefit of tech companies, and their shares. So, which shares have experienced share price gains due to the work-from-home revolution?
With millions of people holed up in a spare room, on a kitchen table, or even the garden as remote working becomes the norm. This has seen a rally in those tech stocks specialising in services for the remote worker. A stark contrast to other sectors that have endured huge sell-offs in their respective stocks. But the question of which shares are best placed to capitalise on this global trend is not so black and white.
While some of the big movements may have been and gone, it could still be worth considering adding these work-from-home stocks to your portfolio. A Gartner survey of 221 HR managers showed that 41% of workers are likely to continue to remote work at least some of the time once offices reopen.
of workers likely to continue remote working once offices reopen
If that's the case, this may be a market to keep an eye on. For the stock trader with more expansive time horizon, the strategy could be to wait for the dip before buying shares of this kind. So, which stocks in this much-talked-about category are best positioned for the longer-term?
The work-from-home stocks to watch
Zoom share price
Zoom [ZM] was almost unheard of a few months ago. Now the video conferencing app is being used for everything from Number 10 policy meetings to catch-ups with friends. Such omnipresence has seen Zoom's share price accelerate over 146% since the start of the year. Trading for around $77 in February the stock has more than doubled to $169.
Zoom's YTD share price rise
April might have seen a cool-off in buying, but the stock is still trading tantalising close to its 52-week high. Is there anymore upside left? Analysts on Yahoo Finance have pinned an average $121.42 target on the stock. A 28% downside on the current price.
Slack share price
Slack [WORK] pitches itself as an informal alternative to office email. And with millions of now home-based co-workers needing to contact each other quickly, traders have been buying into the stock.
Since the start of the year, Slack's share price is up over 36%, trading around the $31 level. March saw a steep sell-off and there are questions over slowing growth and debt. The average price target of $26.2 would see a 16% downside on the current share price. Traders should keep tabs on Slack’s earning updates and pipeline of new clients before picking up the slack.
Slack's YTD share price rise
Twilio share price
Twilio's [TWLO] share price is up over 88% since the start of the year. Most of those gains have come since 7 May, when Q1 earnings thrashed analyst expectations. Up until then, Twilio's share price had been in the doldrums and Wall Street had been expecting a loss. Instead, Twilio saw earnings of $0.06 a share.
Twilio stands to gain from companies shifting communications away from legacy systems and onto the cloud post-outbreak. But have investors missed the boat on Twilio? Brett Kenwell writing on The Street reckons there’s still opportunity, if traders wait for the dip:
"I would love to see an eventual pullback in Twilio. Specifically, a dip down to former resistance at $150 that holds as support would be highly attractive."
Twilio's YTD share price rise
An average 12-month price target of $129.05 would see a 33% downside on the current share price.
DocuSign share price
E-signature company DocuSign's [DOCU] share price has shot up over 62% so far this year. Traders who bought the stock a year ago when it was trading for $51 would have seen a cool 120% upside.
Investors might want to keep an eye out on DocuSign's upcoming earnings. According to Zacks, the consensus is that earnings per share will come in at $0.11, up 57.14% from the same quarter last year. Revenue is estimated at $284 million, up 32.74%. Any beat on these numbers could see traders signing up for more.
DocuSign's YTD share price rise
Okta share price
As anyone who has recently had to log in from home will tell you, user authentication is a big deal. Enter Okta [OKTA], which helps developers build identity controls into apps and online services.
Since the start of the year, Okta's share price has soared over 54%. Like most remote-working stocks, Okta's share price is trading above analyst targets. But for any of these stocks, it’s a case of weighing up just how much the coronavirus has changed office work. If remote working becomes the new normal, then there should be an opportunity for a long-term investor.
Okta's YTD share price rise
Disclaimer Past performance is not a reliable indicator of future results.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.
*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.