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Zacks Investment Ideas feature highlights: Shopify, Zoom Video Communications and Peloton
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For Immediate Release
Chicago, IL – August 30, 2024 – Today, Zacks Investment Ideas feature highlights Shopify (SHOP - Free Report) , Zoom Video Communications (ZM - Free Report) and Peloton Interactive (PTON - Free Report) .
Where Are the Pandemic Winners Now? ZM, SHOP, PTON
A handful of stocks benefited massively during the pandemic. It was an interesting time to be an investor, to say the least, and those who targeted the stay-at-home stocks were rewarded handsomely with considerable gains.
A few of those stocks include Shopify, Zoom Video Communications and Peloton Interactive.
But given their fades from peak popularity, are these former winners still worth investors’ attention? Let’s take a closer look.
Shopify's Growth Remains Robust
Shopify’s platform gained widespread attention during the period, particularly as consumers shifted to online shopping. SHOP shares have by far been the biggest winners of the bunch, up more than 120% over the last two years and widely outperforming relative to the S&P 500.
Shares saw bullish activity following the release of its latest quarterly results in early August, with the company reporting 325% EPS growth on 20% higher sales. The company was firing on all cylinders throughout the period, seeing Gross Merchandise Volume (GMV) increase 22% year-over-year alongside a big boost to its free cash flow.
The growth picture here is also rock-solid, with consensus expectations for its current fiscal year suggesting 51% EPS growth on 22% higher sales. Peeking ahead to FY25, expectations allude to an additional 18% climb in earnings paired with a 20% sales bump.
The stock sports a Style Score of ‘A’ for Growth.
Zoom Shares Soar Post Earnings
Zoom Video Communications’ cloud-native unified communications platform combines video, audio, phone, screen sharing, and chat functionalities. It’s easy to understand why shares were so beloved during the period, as many were forced onto the platform.
While the stock is nowhere near its all-time highs, shares have gained a solid 16% over the last month, fueled by better-than-expected quarterly results.
Concerning the above-mentioned release, Zoom saw a nice boost to its cash-generating abilities, posting free cash flow of $365 million that climbed 26% year-over-year. And the company has found success in landing lucrative customers, with Enterprise revenue climbing 4% from the same period last year.
In addition, the company’s earnings outlook has brightened considerably following the latest set of results. The valuation picture here does look a bit rich, with the current 3.3X PEG ratio well above the 2.1X five-year median.
Peloton Shares Finally Sees Positivity
Peloton shares have been hit the hardest out of the group, down 97% since making all-time highs back in January of 2021. Nonetheless, favorable revisions for its current fiscal year finally began hitting the tape back in early May, with the -$0.65 Zacks Consensus EPS estimate up 43% overall over the last year.
The boost to estimates in early August followed its latest quarterly release, with the company exceeding its guidance on all key metrics and posting year-over-year revenue growth for the first time since Q2 FY22.
As shown below, sales have cratered post-pandemic, with the downward trend continuing since. The sales struggles have weighed heavily on shares, fully reflected by performance.
Nonetheless, there have been several pockets of positivity for the company that hint things could be turning around, such as recently delivering positive adjusted EBITDA and free cash flow in back-to-back quarters for the first time since Q2 FY21.
Bottom Line
While stocks such as thesewere all widely hailed during the pandemic, their performance since then has primarily left a sour taste in investors’ mouths.
All three remain well below all-time highs, though Shopify has been the true leader regarding overall performance. Zoom has traded sideways for months now, with the market seemingly awaiting any positive news to give the stock life again. Peloton is currently in a more concerning spot, primarily due to weak sales and shakeups within management.
Out of the bunch, Shopify shares reflect the most attractive opportunity given its forecasted growth.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: Shopify, Zoom Video Communications and Peloton
For Immediate Release
Chicago, IL – August 30, 2024 – Today, Zacks Investment Ideas feature highlights Shopify (SHOP - Free Report) , Zoom Video Communications (ZM - Free Report) and Peloton Interactive (PTON - Free Report) .
Where Are the Pandemic Winners Now? ZM, SHOP, PTON
A handful of stocks benefited massively during the pandemic. It was an interesting time to be an investor, to say the least, and those who targeted the stay-at-home stocks were rewarded handsomely with considerable gains.
A few of those stocks include Shopify, Zoom Video Communications and Peloton Interactive.
But given their fades from peak popularity, are these former winners still worth investors’ attention? Let’s take a closer look.
Shopify's Growth Remains Robust
Shopify’s platform gained widespread attention during the period, particularly as consumers shifted to online shopping. SHOP shares have by far been the biggest winners of the bunch, up more than 120% over the last two years and widely outperforming relative to the S&P 500.
Shares saw bullish activity following the release of its latest quarterly results in early August, with the company reporting 325% EPS growth on 20% higher sales. The company was firing on all cylinders throughout the period, seeing Gross Merchandise Volume (GMV) increase 22% year-over-year alongside a big boost to its free cash flow.
The growth picture here is also rock-solid, with consensus expectations for its current fiscal year suggesting 51% EPS growth on 22% higher sales. Peeking ahead to FY25, expectations allude to an additional 18% climb in earnings paired with a 20% sales bump.
The stock sports a Style Score of ‘A’ for Growth.
Zoom Shares Soar Post Earnings
Zoom Video Communications’ cloud-native unified communications platform combines video, audio, phone, screen sharing, and chat functionalities. It’s easy to understand why shares were so beloved during the period, as many were forced onto the platform.
While the stock is nowhere near its all-time highs, shares have gained a solid 16% over the last month, fueled by better-than-expected quarterly results.
Concerning the above-mentioned release, Zoom saw a nice boost to its cash-generating abilities, posting free cash flow of $365 million that climbed 26% year-over-year. And the company has found success in landing lucrative customers, with Enterprise revenue climbing 4% from the same period last year.
In addition, the company’s earnings outlook has brightened considerably following the latest set of results. The valuation picture here does look a bit rich, with the current 3.3X PEG ratio well above the 2.1X five-year median.
Peloton Shares Finally Sees Positivity
Peloton shares have been hit the hardest out of the group, down 97% since making all-time highs back in January of 2021. Nonetheless, favorable revisions for its current fiscal year finally began hitting the tape back in early May, with the -$0.65 Zacks Consensus EPS estimate up 43% overall over the last year.
The boost to estimates in early August followed its latest quarterly release, with the company exceeding its guidance on all key metrics and posting year-over-year revenue growth for the first time since Q2 FY22.
As shown below, sales have cratered post-pandemic, with the downward trend continuing since. The sales struggles have weighed heavily on shares, fully reflected by performance.
Nonetheless, there have been several pockets of positivity for the company that hint things could be turning around, such as recently delivering positive adjusted EBITDA and free cash flow in back-to-back quarters for the first time since Q2 FY21.
Bottom Line
While stocks such as thesewere all widely hailed during the pandemic, their performance since then has primarily left a sour taste in investors’ mouths.
All three remain well below all-time highs, though Shopify has been the true leader regarding overall performance. Zoom has traded sideways for months now, with the market seemingly awaiting any positive news to give the stock life again. Peloton is currently in a more concerning spot, primarily due to weak sales and shakeups within management.
Out of the bunch, Shopify shares reflect the most attractive opportunity given its forecasted growth.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.