The stock market has recently been out of touch with the US economy. The economy is still shrinking under the influence of the coronavirus, resulting in an unemployment rate of 8.4%. however, S&P 500 In the past 12 months, Google’s stock price has risen by more than 12.5%, mainly driven by rising technology stocks.
However, because the economy and the stock market are out of sync, some investors want to know if another major market adjustment is coming (such as the one we saw in March). If and when this happens, some Motley Fool contributors will list some companies you might want to buy. This is why year (NASDAQ: ROKU), Relaxation technique (New York Stock Exchange: WORK)with fast (New York Stock Exchange: FSLY) Cut in.
Streaming leaders are on another path
Danny Wiener (Roku): Nowadays, streaming media services are everywhere, and it seems that new streaming media services will emerge every month. Not only that, the existing services are expanding their product range to enhance their chances of standing out from the crowd. The struggle for eyeballs is unremitting. Content has taken the center stage and spending has skyrocketed to satisfy consumers’ infinite demand for programming.
Roku has taken a different path by providing a platform that allows viewers to aggregate all viewing options in one place. The company offers thousands of applications, including subscription services, such as Netflix, AmazonMain video, and Walt DisneyHulu and Disney+, as well as niche advertising-supported services, including anime protagonist Crunchyroll, BritBox’s British shows, variety movies and TV series ViacomPluto TV, or horror classic AMC networkNothing to say. By becoming an agnostic one-stop shop, it can meet the programming needs of a broad audience.
Another branch of the Roku strategy is to take a page from Netflix’s script by making Netflix products ubiquitous. The platform can be used not only on the company’s streaming media device of the same name, but also on more and more smart TVs. Roku developed a smart TV operating system (OS) specifically designed for this task from the ground up, instead of using a redesigned mobile app. The company licenses Roku OS to smart TV manufacturers who don’t want to reinvent the wheel. The strategy was so successful that in 2019, one-third of smart TVs sold in the United States and one-quarter of smart TVs sold in Canada contained Roku OS, thus expanding the company’s large and growing user base.
Roku’s approach has yielded substantial returns, as evidenced by recent operational indicators. In the second quarter, the platform’s active accounts climbed to 43 million, an increase of 41% year-on-year. More importantly, audience participation is higher than ever, with 14.6 billion streaming media playing time accounting for 65%. At the same time, the average income per user continued to rise, reaching $24.92, an increase of 18%.
These achievements are the basis for Roku’s impressive financial performance, although the uncertainty caused by the pandemic has caused many marketers to cut back on advertising-this represents the largest share of the company’s revenue. Overall, despite the sharp decline in the advertising business, total revenue was US$356 million, a year-on-year increase of 42%. Its platform section includes advertising, Roku channels and its operating system licenses, and its growth rate is even faster, increasing by 46%.
Since the beginning of this year, Roku’s performance has shown why investors should buy during the correction period. After its stock price fell 42% during the pandemic-induced plunge, the stock began to rebound and has soared 123% since bottoming in March. Roku’s impressive results indicate that to stop the company’s growth will require more than a little market decline.
The story of this email alternative has just begun
Brian Withers (Slack): Many people believe that Slack’s second quarter was disappointing, and the decline in the technology stock market has caused Slack’s stock price to fall more than 30% from its high at the beginning of the year. As its valuation is close to the lowest level in history, the company provides patient investors with the opportunity to purchase a team collaboration platform at a discount. Let us see why you should join.
There is no doubt that the coronavirus is a double-edged sword for Slack. On the one hand, it has attracted twice the number of customers (20,000) in the first six months of this year. But its year-on-year billing growth (a metric that indicates the future contract value growth of new and existing customers) fell by half this quarter (from 52% to 25%). This is due to the $11 million bill discount offered to customers affected by COVID-19 so far, and the contract period has been shortened due to economic uncertainty. The decline in bill growth frightened investors and clouded the company’s good news.
For the most recent quarter ended July 31, 2020, revenue grew 49% year-on-year. Zoom video communication, But considering the current economic conditions, it left a deep impression and was the first in a series of key indicators released this quarter.
Operating cash flow increased by 7 percentage points year-on-year, reaching 7% of revenue, and the total amount of cash and marketable securities on the balance sheet was $1.5 billion. This cash reserve and positive cash flow will enable the management team to continue to invest heavily in growth efforts. Remaining performance obligations (RPO) reached a record 388 million US dollars, an increase of 80% year-on-year. RPO represents the customer who is still in arrears for more than 12 months of contract arrears.
Large customers with an annual contract value of more than US$100,000 increased by 37% year-on-year, despite bucking the trend, reducing net dollar retention by 125% (down from 136% in the second quarter of 2020) and 50 customers withdrew from the US$100,000 plus cost The type of expenditure in the quarter due to staff reduction. These large customers are becoming more and more important to the company because they account for 49% of revenue, up from 43% in the second quarter of last year.
Finally, the number of customers using Slack Connect (which allows companies to share communication channels) has grown to 37,000, an increase of 37% over the same period last year. Its huge network of 380,000 Slack Connect users is becoming a valuable marketing channel for introducing massage platforms to new customers.
With millions of workers trying to collaborate with an obnoxious and outdated tool called email, Slack has a huge growth channel. The recent fall in stock prices has also provided investors with huge opportunities. do not miss it.
A fast-growing company with long-term development prospects
Chris Nigel (fast): Tech investors attracted Fastly this year, but if you have never heard of the company, don’t worry-it’s not too late to benefit from the company. Fastly’s technology can help companies speed up their websites, applications, and videos (hence “fast” in Fastly), and the company’s development is like violent.
In the second quarter (reported on August 5), Fastly’s revenue increased by 62% to $75 million, with adjusted earnings per share of $0.02. Both figures easily exceeded analysts’ expectations for the quarter. In addition, Fastly increased its gross profit margin from 55.6% in the same period last year to 61.7% and added 114 new customers.
As the company wanted to provide its online products faster and more reliably during the coronavirus pandemic, it soon experienced this huge growth. The blockade a few months ago and the millions of workers now working from home means that companies are looking for every possible way to make the online experience the best. This is Slack, TikTok, Shopify, GitHub and Pinterest Everyone wants to quickly improve their online user experience.
Slack’s stock price has risen 187% in the past 12 months, which is actually lower than its high a few months ago. But investors need to keep a long-term perspective on this stock. The company already has an impressive list of customers and is constantly adding more customers. As the coronavirus forces many people to work more online than ever before, and also spend more leisure time online, for many companies, fast will likely continue to be the service of choice.
As the US economy seeks a foothold in the coming months, the market may continue to fluctuate, but investors should remember that Fastly has firmly established itself in its niche market. The company may continue to grow in the next few years and bring considerable benefits to investors.