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We are looking at Uber (UBER) and Lyft (LYFT) today.
Why Uber and Lyft stocks fell today?
Shares of Uber and Lyft were down almost 8% each on Wednesday. The news broke that California may be moving rapidly toward forcing the two companies to hire their drivers as employees.
If California succeeds in forcing the so-called gig economy companies such as Uber and Lyft to hire their independent contractors, it leads to a significant hit to those already unprofitable companies' margins. California says if your business is giving people a taxi ride, you have to own and be responsible for what moves people. The drivers are the business of Uber and Lyft, and they have to be the employees of Uber and Lyft.
In a way, California is questioning the future of the so-called gig economy and independent contractors for everything.
We are looking at Salesforece.com (CRM), today.
Why did Salesforce.com stock fell today?
Shares of Salesforce were down almost 2% on Tuesday. The price decline can be in anticipation of the next week's earnings reports and due to investors locking their gains before the earnings. Overall, it's a bit surprising to see that the price decline considering the joint announcement with Siemens (Ticker: SIEGY).
The two companies are making a system that can enable companies returning to work safely. Siemens connects its products with Salesforce's work.com, traces the employee's movements, and warns them if the number of a room's occupants exceeds a certain threshold.
This is an example of a technology company that can explore a new business opportunity without much friction. This is how a technology company can come up with a new revenue opportunity that was never forecasted by investors had they only been using historical data. We don't know if this means new revenue for Salesforce, but we just enjoy observing how the company can slide and find its way into new revenue opportunities.
We are looking at Fastly (FSLY), today.
Why did Fastly stock jump today?
Shares of Fastly (FSLY) were up more than 16% on Monday. The stock has grown more than 270% since the start of 2020 and just received new "buy" and "strong-buy" recommendations by financial analysts.
The company is benefiting from the transition of the world to digital lives. It enables faster delivery of content via what's known as the "edge cloud." According to the CEO, all content on the internet can benefit from the "edge cloud" and move away from legacy systems while being secured at the "edge." The company only has 300 customers, and its closest competitors have thousands of customers, and it is only starting to grow.
Despite being a recent IPO, and not generating profit or free cash flow, the momentum of the market is driving the stock further, and investors continue to stay optimistic about the future of Fastly. The concerning aspect of the stock is trading at 25 times its sales. So, the decision is whether the growth rate can justify the stock's high price. This is canbe an addition to your watchlist as both a speculative and long-term hold. Make sure you have a look at the company's Stock Card, before making a decision.
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We are looking at Ping Identity (Ping) today. This stock came up earlier today in the conversation among members of our Intelligent Stock Market Investors' private community. We were discussing the work-from-home stocks, and Ping Identity came up as a "baby Okta." And, baby Okta it is ...
Shares of Ping Identity were down more than 5% on Friday. There wasn't any specific reason for such a price decline. We presume that investors took some of their COVID-19 stellar gains off the table, and the price decline is not about any changes in the Ping's growth opportunity.
The company is a 2019 IPO, with more than $2 billion in market capitalization. It enables its clients to offers secure access to any service or application to customers, employees, and partners. For example, it seamlessly integrates with Salesforce, Slack, Zoom, Zscaler, and Microsoft Office 365 apps and is available on the AWS marketplace as an add-on identity management application. The company appeals to large enterprise customers because it offers a flexible infrastructure that can be applied to cloud, on-premise, and private cloud. That's why Ping works with several Fortune 100 companies and has a high dollar-based retention rate of 116%, and 115% in December 2018 and December 2019. COVID-19 pandemic has forced several large enterprises to take the leap or accelerate their transition to digital, and that can explain the rapid growth rate of demand for Ping since the start of the work-from-home trend.
Financially, the company is not profitable; neither does it generate free cash flow. However, it has a strong balance sheet, no debt, and enough liquid assets to keep on investing and growing. Among companies facilitating the digital transformation, those who are already focusing on large enterprises with legacy and hybrid solutions are some of the fastest-growing stocks. This trend enables Ping Identity to get in front of several new large enterprises and get a foothold in its core market that can continue to pay off for Ping. Check out the company's Stock Card to get to know this watchlist-worthy stock.
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We are looking at Etsy (Ticker: ETSY) today.
Shares of Etsy were up more than 9% on Friday. The company is benefiting from the work-from-home trend as people's appetite for do-it-yourself home decoration is higher than ever. Investors are observing such a trend and are excited about the effect of the Corona economy on Etsy. According to TechCrunch, searches for wall decor or art have jumped 94% compared to the last year, and searches for paintings are up more than 54% in the previous three months. Moreover, according to the company's investor presentation, the company sold more than 12 million face masks in April, representing 17% of the overall 100% growth in the company's total revenue in Q1. Investors can't hold off their excitement and keep buying Etsy's stocks.
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