3 Work-From-Home Stocks To Avoid As People Return To The Office

Easing pandemic restrictions and the consequent resumption of economic activities are causing some employees to return to their offices after prolonged remote working.

However, the ongoing digitalization of various industries has made business operations efficient and workers more productive over the past year. So, while enterprises may not be willing to totally return to pre-pandemic work arrangements, thereby sacrificing the benefits of remote working, many are resuming work from office for at least some percentage of their workforce as part of their long-term plans to operate through hybrid working models.

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Therefore, popular work-from-home stocks Zoom Video Communications, Inc. (ZM - Get Rating), DocuSign, Inc. (DOCU - Get Rating), and Slack Technologies, Inc. (WORK - Get Rating) could retreat in the near-term because of reduced demand for their solutions. So, we think these stocks are best avoided now.

Zoom Video Communications, Inc. (ZM - Get Rating)

ZM provides a video-first communications platform and web conferencing services worldwide. The San Diego company offers meetings, chat, rooms and workspaces, phone systems, video webinars, marketplace, and developer platform products. It serves the education, finance, government, and healthcare industries.

Several lawsuits have been filed against ZM recently, alleging that the company made materially false and misleading statements regarding its  business, operational and compliance policies. According to the plaintiffs, ZM had inadequate data privacy and security measures contrary to its assertions, and  its video communications service was not end-to-end encrypted, thus placing its users at an increased risk of having their personal information accessed by unauthorized parties. These  lawsuits are  likely to impact  ZM’s sales negatively  in the coming months.

For its fiscal first quarter, ended March 31, 2021, ZM’s cost of revenue increased 155.5% year-over-year to $264.99 million. The company’s total operating expenses came in at $464.93 million for the quarter, up 131.2% from the prior-year period. As of April 30, 2021, the company had cash, cash equivalents, and restricted cash of $1.60 billion.

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Kirk Sheffield 2 months ago Member's comment

I think #Docusign is here to stay! This is so much quicker and easier than paper. $DOCU