Running From Home

Investors can no longer hide their disappointment with 2020's hottest stocks: the stay-at-home plays like Peloton Interactive and Zoom Video, which soared in the early days of the quarantine. Shares of Zoom tumbled 17% today despite a better-than-expected earnings report from the communications software firm. For the first time ever, Zoom generated $1 billion worth of revenue in a quarter. That's a notable achievement for a company whose revenue had never broken $200 million in a quarter prior to the pandemic.  

The problem, my colleague Max Cherney notes, is that investors are bracing for what comes next as offices slowly re-open. Zoom executives forecast essentially flat growth in the coming quarters.

"We feel good that people are out moving around the world," Zoom CFO Kelly Steckelberg told investors on a conference call last night. "But it's certainly creating some headwinds, as we said, in the online segment of our business."

Shares of Peloton fell last week after executives offered their own disappointing forecast for the coming months. 

The next stay-at-home test comes tomorrow morning, notes Barron's Connor Smith, when Campbell Soup reports its results. Campbell's sales jumped 18% in the quarter ending July 2020 as consumers stocked up their pantries. This year, analysts expect a reversion to the mean, with July 2021 quarterly sales falling 14%, to $1.8 billion. Investors have already jumped on the trend. Campbell shares are down 14% this year, versus a 20% gain for the S&P 500.