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What's in Store for Work-From-Home ETF & Stock Earnings?
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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.
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 - Free Report) and Microsoft (MSFT - Free Report) .
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 - Free Report) and Amazon-heavy ETF ProShares Online Retail ETF (ONLN - Free Report) .
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 - Free Report) and Rank #2 Okta Inc. (OKTA - Free Report) 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 CrowdStrikeCRWD reported earnings and bested guidance expectations.
Upland Software Inc. (UPLD - Free Report) and BOX Inc. (BOX - Free Report) 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 - Free Report) .
Remote Communications
Companies like Zoom Video Communications Inc. (ZM - Free Report) and RingCentral (RNG - Free Report) ) 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 - Free Report) and Zoom has 3% exposure to WisdomTree Cloud Computing FundWCLD.
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What's in Store for Work-From-Home ETF & Stock Earnings?
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 - Free Report) and Microsoft (MSFT - Free Report) .
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 - Free Report) and Amazon-heavy ETF ProShares Online Retail ETF (ONLN - Free Report) .
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 - Free Report) and Rank #2 Okta Inc. (OKTA - Free Report) 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 - Free Report) and BOX Inc. (BOX - Free Report) 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 - Free Report) .
Remote Communications
Companies like Zoom Video Communications Inc. (ZM - Free Report) and RingCentral (RNG - Free Report) ) 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 - Free Report) and Zoom has 3% exposure to WisdomTree Cloud Computing Fund WCLD.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>