This work culture may last longer than anticipated. Investors might want to consider investing in Zoom Video (ZM), DocuSign(DOCU), or Fiverr (FVRR), all of which benefit from this trend. Continue reading.
Remote working is likely to be a trend that will continue. Teleconferencing and telework technologies have improved to the point that some businesses are able to thrive with remote teams.
Investors can buy Zoom Video Communications, Inc., DocuSign, Inc., and Fiverr International Ltd., which all benefit from the shift towards remote work.
Over 55% believe that their work in their particular industry can be performed remotely. Mobile workers who work for communicative employers tend to be 5X more productive, and 3X less likely than other workers to burn out.
According to Remote Work Statistics as of 2022 the majority of remote business spending will be on Web conferencing (67%).
The digital workplace provides personalized services based on employee roles. Employees can access data and services at any time, anywhere. Global digital workplace industry will reach $234 billion in 2032. Market growth is expected to be 22.3% CAGR until 2032.
Vanguard Growth ETF's (VUG) 16.9% return over the last six months is evidence of the interest investors have in growth stocks.
Let's dig deeper into the fundamentals.
ZM provides video communication platforms. The Company offers a platform for unified communication and collaboration that transforms the way people interact. It connects them via frictionless and secure meeting, phone, chat and content sharing.
Zoom announced on April 15, 2023 that it would acquire Workvivo to provide customers with new ways to engage, inform, and connect their employees.
ZM announced on March 27, 2023 that Zoom IQ would be extended. Zoom IQ is a smart companion which encourages collaboration, unlocks the potential of people by organizing ideas, generating content for chats and emails, preparing agendas for meetings, etc.
OpenAI will be used to enhance the company's unique, federated AI approach based on flexibility.
ZM's EV/EBIT forward multiple of 7.76, is 53.4% less than the industry-average of 16.65. Its forward EV/EBITDA multiplier of 7.33%, is 45% less than the average industry multiple of 13.33.
ZM's levered 12-month FCF margin is 37.41%, which is 462.8% more than the industry-average of 6.65%. Its ROTA for the trailing 12 months is 1.28%, which is 118.5% more than the average industry ROTA.
ZM's revenue for the fourth fiscal quarter, which ends January 31, 2023 was $1.12 billion. This is an increase of 4.3% over last year. The gross profit of the company increased by 1.2% to $823.45 millions during the same period.
The total assets of the company were $6.36 billion at the end of January 2023 compared to the $6.18 billion it was for the same period in 2022.
ZM's revenues grew by 91.8% CAGR over the last three years. Additionally, EBIT has grown at a CAGR 168.4% in the last three years.
Analysts anticipate ZM's revenues to grow marginally from year to year to $4.46 Billion in 2024. In 2024, its EPS is expected to be $4.21. In all four quarters, it exceeded EPS expectations. ZM shares gained 2.3% intraday, closing the last trading day at $62.20.
ZM's PoWR Ratings reflect a positive outlook. The stock is rated B overall, which is equivalent to a Buy under our proprietary rating system. The POWR ratings assess stocks based on 118 factors, each of which has its own weighting.
ZM is rated B for both Value and Quality. It is ranked 25th out of 79 stocks in the Technology-Services industry. Click here to see the POWR ratings for ZM for Stability and Sentiment.
DocuSign, Inc. (DOCU)
DOCU offers electronic signature solutions in the United States as well as internationally. The company provides the DocuSign electronic signature solution, Contract Lifecycle Management and Gen for Salesforce. The company sells products via direct sales, partner-assisted selling and self-service web purchasing.
The industry average is 17.78x. Its price/cash flow multiple is 13.40x.
DOCU's 12-month trailing gross profit margin of 78.82%, and its levered FCF of 29.46%, are respectively 59.3% higher and 341% more than the averages for the industry of 49.47%.
DOCU's revenue totaled $659.58 for the fourth quarter of its fiscal year that ended on January 31, 2023. This is an increase of 13.6% over last year. The gross profit increased by 16.2% to $522.15 millions.
The non-GAAP income attributable common shareholders was $133.28 millions and the non-GAAP income per share was $0.65. These figures were up by 33.5% and 35.44% respectively.
Over the last three years, DOCU's revenues grew at 37.2% CAGR. Additionally, its leveraged FCF has grown at a CAGR 48.6% in the last three years.
Street estimates that DOCU's revenues will increase 7.5% annually to $2.70 Billion in 2024. The company's EPS for the same time period is expected to increase 18.7% over the previous year to $2.41. In all four quarters, it exceeded EPS expectations. In the past six-month period, the stock gained 16.4% and closed the last trading day at $47.54.
No surprise, DOCU's overall rating is B. This is equivalent to a buy in our POWR ratings system. It is rated A for Growth, and B for Quality. It is ranked third out of 25 stocks within the Software - SAAS sector.
In addition to the above ratings, we have also given DOCU ratings for Value, Sentiment Stability and Momentum. All DOCU ratings are available here.
FVRR, with its headquarters in Tel Aviv (Israel), operates a global online marketplace. The platform allows sellers to sell services and buyers buy them.
FVRR has a trailing-12 month gross profit margin of 68.1% more than the industry average. Leveraged FCF margins of 10.64% for the trailing-12 months are 1% higher than industry average of 4.81%.
FVRR reported revenue of $83.13 millions for the fourth quarter fiscal year ending December 31, 2022. This is an increase of 4.2% over last year. Gross profit was $67.32 millions, an increase of 4.3% over the previous year.
The total assets of the company were $625.22 millions for the period ending December 31, 2022 compared to $468.22 for the same period in 2021.
FVRR’s revenue has grown at a CAGR 46.6% in the last three years. Its total assets have also grown at a CAGR 57.5% in the last three years.
The consensus estimate of $426.21 for the year 2024 represents a 18.5% year-over-year increase. In 2024, its EPS is projected to increase 39.2% over the previous year to $1.70. In all four quarters, it exceeded EPS expectations. FVRR shares dropped 5.5% intraday, closing at $26.39 in the last trading session.
The strong fundamentals of FVRR are reflected by its POWR ratings.
It is ranked 19th in the Internet Industry. It is rated B for growth. Click here to see FVRR's additional rating for Sentiment.
ZM shares traded at $63.82 on Friday morning. This is an increase of $1.60 (+2.57%). ZM shares have declined by -5.79% year-to-date compared to the S&P 500 benchmark index, which has risen 7.92% during the same time period.
Rashmi K. Kumari
Rashmi's passion for capital markets, financial regulation, and wealth management led her to pursue an investment analyst career. She has a master's in commerce and aspires, with her degree, to help individual investors understand complex financial issues.