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Continued Coronavirus-Imposed Social Distancing Perks Up 5 Stocks

Aniruddha Ganguly

Social distancing has gained tremendous significance following the outbreak of coronavirus (COVID-19) pandemic. Healthcare experts globally have been advocating this practice to check the mortality rate and the spread of the deadly virus.

Notably, the United States now reels under the burden of maximum coronavirus cases in the world, per the Johns Hopkins University data. Total infected persons in the country now count to 164,610. Per White House health adviser Dr. Anthony Fauci, the death toll can shoot up to 200,000 with millions contracting the infection.

Recognizing the gravity of the situation U.S. President Donald Trump extended the national social-distancing guidelines through Apr 30. On a worrying note, Trump had been favoring an earlier resumption of business by Easter, which per health experts, might have spiked the mortality rate and the economic damages.

Although an expansive rate physical distancing is expected to hurt business sentiments, there are a few stocks that will benefit from this policy. Below we discuss five such stocks.

 

Key Picks

Zoom Video Communications ZM is undoubtedly one of the biggest gainers of the coronavirus-induced social distancing trend. The stock has skyrocketed 121.8% on a year-to-date basis.

Solid demand for this Zacks Rank #2 (Buy) company’s cloud-native unified communications platform, which combines video, audio, phone, screen sharing and chat functionalities, has jumped significantly in the past three months owing to remote working and online learning. The extended social distancing measure is expected to further boost sales.

Earlier this month, the company announced availability of its Zoom Phone cloud service in 11 additional countries. Moreover, Zoom Video lifted its 40-minute meeting limit on free basic accounts for K-12 schools in a number of countries including Australia, India, New Zealand, Israel, Canada, Germany, the United Kingdom, the United States et al.

Apart from remote workers and online educators, Zoom Video solutions are rapidly getting adopted by telehealth providers. Remote diagnosis is helping them adhere to social-distancing norms without compromising on patient healthcare.

The Zacks Consensus Estimate for fiscal 2021 earnings is pegged at 42 cents per share, suggesting 20% growth from the figure reported a year ago.
 

Zoom Video Communications, Inc. Price and Consensus

 

Netflix’s NFLX solid content portfolio aided it to successfully withstand the coronavirus-led stock market rout. The streaming giant is currently the best performing stock among the FAANG group, with shares up 14.7% year to date.

Social distancing and lockdowns on a global scale are driving consumption of media content on the Internet. Courtesy of its diversified content portfolio, which is attributable to its heavy investments in the production and distribution of localized, foreign-language content and an expanding international footprint, Netflix is hugely benefiting from this upswing.

Notably, this Zacks #2 Ranked stock’s paid subscriber base increased 20% year over year to 167.09 million in 2019. The company expects to build a base worth 174.09 million paid subscribers globally in the first quarter of 2020. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Further, launch of low-priced mobile plans in India, Indonesia, Malaysia, Philippines and Thailand is expected to boost Netflix’s subscriber base in APAC.

The consensus mark for 2020 earnings is pegged at $6.05 per share, implying 46.5% growth from the prior-year reported number.
 

Netflix, Inc. Price and Consensus

 

NVIDIA NVDA is gaining traction from strong growth in GeForce desktop and notebook GPUs, which is aiding its gaming revenues. The work-and-learn-from home momentum is driving demand for PCs and cloud-based services, which is contributing to the company’s top-line growth.

Moreover, an uptick in Hyperscale demand is a tailwind for this #2 Ranked player’s data-center business. Moreover, NVIDIA’s Parabricks tool will be very useful for researchers who are working to combat the coronavirus pandemic. Through this GPU-accelerated genome analysis toolkit, researchers can accomplish analysis process in just a few hours, which previously took many days. (Read More: NVIDIA Offers Coronavirus Researchers Free Access to GPU Tech)

The consensus mark for fiscal 2021 earnings stands at $7.65 per share, suggesting 32.1% growth from the year-earlier reported figure.
 

NVIDIA Corporation Price and Consensus

 

Microsoft MSFT is benefiting from the rapid uptake of its Office 365, Teams collaborative workplace solution, Skype and Azure cloud computing.

This Zacks Rank #3 (Hold) company is re-branding Office 365 as Microsoft 365, which will be available from Apr 22 onward. Microsoft 365 offers family and individual plans apart from businesses and enterprises.

Further, Microsoft is now integrating Teams with Slack to allow users to work from home efficiently amid the coronavirus-triggered lockdown. Presently, Teams has more than 44 million daily active users. (Read More: Microsoft Teams and Slack Integration to Aid User Base)

Moreover, usage of Microsoft Skype surged 70% in a month to 40 million people while Skype to Skype calling minutes soared 220% month over month.

The Zacks Consensus Estimate for fiscal 2020 earnings is pegged at $5.61 per share, hinting at 18.1% growth from the previous-year reported figure.
 

Microsoft Corporation Price and Consensus

 

Amazon AMZN is riding high on robust sales owing to social distancing. The company’s massive supply chain is deployed to dispense necessary household items as its users are currently confined to their homes. Moreover, the company’s Whole Foods stores is dedicating an entire hour to serve only senior citizens in an attempt to keep them safe from mingling with the crowds as they are more susceptible to this COVID-19 infection.

Moreover, this Zacks Rank #3 company’s cloud computing platform, Amazon Web Services, is playing an instrumental role in supporting the work-from-home routine. Notably, AWS Transit Gateway is enabling users to connect their Amazon Virtual Private Clouds (VPCs) and on-premises networks to a single gateway. This brings office to their home and assists in smoothly connecting with their colleagues. (Read More: Here're the 5 Big Winners from the Coronavirus Pandemic)

Additionally, Amazon is resorting to a slew of initiatives to combat the coronavirus pandemic. AWS partnered with Conduent’s Maven platform to control the coronavirus spread. This apart, the company announced the AWS Diagnostic Development initiative wherein it is investing $20 million. The program aims at accelerating the development of a faster COVID-19 testing.

The Zacks Consensus Estimate for 2020 earnings stands at $28.11 per share, indicating 22.2% growth from the preceding year’s reported number.
 

Amazon.com, Inc. Price and Consensus

 

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Click to get this free report Microsoft Corporation (MSFT) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research