It is time to move on. Almost two years after the start of the pandemic, that is the message from the stock market. It doesn’t matter that masking requirements continue in stores, hotels, airplanes and other indoor locations, and that we are only now rolling out the Covid-19 vaccine to school-aged children. Investors have given up on pandemic trading over the past few trading days, and I don’t think the process is quite over.
Let’s assess the damage done by another big week of tech revenue, along with some predictions on where we are headed next.
Edtech is offline: One of the biggest wonders of the week came from
(ticker: CHGG), which offers online courses, homework help, and other support services for high school and college students. Chegg’s shares fell 50% after the company warned it was losing students. All of the Covid-era gains of action have now been erased. Among other things, Chegg said some college students are dropping out of school and entering the workforce. Chegg’s warning sparked a massive sale of education plays, including some that could actually benefit newly industrious job seekers.
(COUR), for example, published better than expected results last week; the company focuses on vocational training and benefits from workers seeking to improve their market value. Nonetheless, Coursera shares fell about 14% in three days.
It’s time to hit the road: Some of these former students are now circulating and taking passengers. The two
(UBER) are seeing a steady improvement in their ridesharing business, in part due to the increased number of drivers, which until recently were scarce. Uber said its driver pool has grown 65% since January and more than 20% since June. Demand is also coming back. Uber said there was more demand on Halloween weekends than the same days in 2019. Lyft saw its revenue increase 73% in the quarter, while Uber’s revenue jumped 72%. %. Meanwhile, Lyft said airport trips have almost tripled year over year, which relates directly to my next point.
It’s vacation time: No sector of the economy has been more affected by the pandemic than the travel industry, but there are clear signs that a recovery is underway. Online travel agencies all posted substantial growth in the third quarter, in most cases crushing Wall Street estimates. Hotel, airline and rental car reservations have returned to pre-pandemic levels. For
(ABNB), third-quarter revenue reached $ 2.2 billion, up 67% from a year ago. More remarkable still, it was 36% higher than the comparable period of two years ago, before the start of the pandemic. The short-term rental company has been a major beneficiary of the work-from-anywhere trend – and is now seeing improvement in its primary leisure travel market.
At the same time, revenue increased by 77% in the quarter to
(BKNG), which owns Priceline, Bookings.com and other travel sites, while
The turnover (EXPE) increased by 97% compared to the previous year. After jumping 16% on Friday, Expedia stock is near an all-time high. While I am skeptical of the full recovery in business travel, the demand for leisure travel is clearly stalled. The risks of Covid remain – any new strain could turn the tide in a flash – but 2022 is expected to see a travel boom.
The great defeat: Investors have abandoned some of the great success stories of the pandemic era.
Focus on video communications
(ZM) is down 21% since the start of the year, a direct consequence of the slowdown in its videoconferencing activity.
(ROKU) sold 8% on Thursday, increasing their loss since July to nearly 40%. Roku suffers as people leave the couch and return to their offices and places of entertainment; continuing component shortages are also weighing on the company’s hardware.
During this time,
Shares (PTON) plunged 35% on Friday, after the provider of connected home bikes and treadmills provided a disappointing outlook. Peloton, which grew 434% in 2020, is down 63% in 2021. In contrast, revenue increased 46% over the quarter to
(PLNT). The gym operator’s shares are trading at record highs.
(LYV) are also at a new high. The company generated $ 2.2 billion in concert revenue in the quarter, up from just $ 155 million a quarter earlier. Rock On.
Upcoming attractions: In a few weeks, we’ll start seeing profits for a multitude of cloud-based software companies whose quarters typically end on October 31. digital technologies by businesses large and small. This is probably good news for a cloud share group that understands
We got a glimpse of the trend last week from
(BILL), which helps small businesses digitize their payment systems. The title was up 14% on Friday. CEO René Lacerte told me that the company is seeing a slight increase in the digitization of even the most basic business processes. Bill.com competes primarily with paper-based processes: checks, paper folders, and sticky notes. Strong recent results from Microsoft Azure, Amazon Web Services, and Google Cloud also suggest the continuing digital transformation trend. And then there is
(DOCN), which provides cloud services to small businesses. Its title jumped 11% Thursday on better than expected results.
In short, consumers are returning to pre-Covid habits, but businesses are still moving to the cloud.
Write to Eric J. Savitz at [email protected]