Experienced stock market investors make their choice, evaluating the sustainability of companies during the crisis, such as pandemic COVID-19, and long-term prospects of the company. Among others in the technology sector there are three suitable companies.
In recent months, stock market investors watched as strong drop and strong growth of individual stocks amid the pandemic COVID-19. If you do not take into account those whose growth may be temporary, and consider the company’s long-term prospects, pay attention to these three market leaders: Peloton Interactive (PTON), Spotify (SPOT) and Netflix (NFLX).
The Peloton demand exceeds supply
Peloton Interactive was a pioneer in the sales of services online-fitness, entered the market in 2012. The company receives the main income from the sale of special stationary bikes and treadmills with screens for broadcast training and makes a subscription platform with a large selection of online classes that include yoga, strength training and more.
Shares of Peloton increased by 103.4% compared with the beginning of the year and of 117.6% over the last quarter.
It is worth noting that the company has demonstrated strong growth and to pandemics in the last two financial years sales of simulators and interactive content doubled, and 2020 fin. the year promises to be a record.
The first three months of 2020, was only partially affected by the closing period of gyms and fitness centers, however, showed a strong rise in the sale of equipment and subscriptions (total connected fitness subscribers exceeded 1 million people). The total income quarter rose by 66% compared to the previous year, while income from subscriptions to 92%.
The demand for bicycles Peloton exceeded the supply, with the result that the company is struggling to increase production capacity. The production of bicycles by June quickly doubled compared to the rate prior to the beginning of the COVID-19 in early March, but orders still several weeks more than usual.
The management expects a significant Peloton meet demand by the end of July or early August. The company also invests in new modern production plant in Taiwan, its launch will help to meet the demand in the festive season at the end of this year.
A great long-term advantage of the Peloton is an extreme engagement and loyalty of users. Analysts say membership Peloton “fanatical” and point to record-high Net Promoter (NPS) 80 – 93, talking about the vast majority of fans. Evaluation of NPS above 50 is considered excellent, a score above 70 is considered high world level.
Become a leader at home, the Peloton has prospects for expansion into international markets.
Spotify is the leader in streaming audio
Spotify also proving valuable to investors in a sustainable and continuous growth trajectory. For the 1st financial quarter of its total number of active monthly users (MAU) and premium subscribers increased by 31% compared to last year’s value and is similar to recent rates.
Thus, the total level of engagement decreased. The only exception are the podcasts (online audio shows) that many people listened to it during my commutes to the start of the pandemic.
However, the situation with podcasting may soon change dramatically for the better. In may, Spotify announced the signing of a multi-year exclusive deal with the famous showman Joe Rohan and his extremely popular podcast the Joe Rogan Experience. It will attract even more listeners of Spotify, some of which will become Premium subscribers and regular listeners of the advertisement.
Through exclusive podcasts, Spotify will get a long-term opportunity to create original content to monetize in the rapidly growing base of listeners.
Shares of Spotify grew by 72.6% since the beginning of the year and in 112.6% over the last quarter.
Netflix – a service from which consumers will refuse in last turn
The output of the competing streaming services from Apple (AAPL) and Disney (DIS) could not undermine the leadership of Netflix, whose shares rose by 40.6% since the beginning of the year.
Report of the 1st quarter of Netflix affected, struck by the increasing number of subscribers: 15.77 million against forecasts of wall Street 8.22 million
The number of viewers Netflix has already exceeded 182,86 million and, according to analysts, they will not refuse services in the short term, an even greater number of failures will receive the cable providers, whose decrease in value, given that in a pandemic they don’t even include the live broadcasts of sporting events.
Netflix still offers the rich library, with lots of exclusive content. Thus, despite the stopping of production due COVID-19, the company is preparing to introduce new content in this and next year. Netflix usually ends up shooting long before the release date that gives it a competitive advantage in the current environment.
Thus, investors who do not have a Peloton, Spotify and Netflix in your portfolio, you should consider the long-term prospects of these companies, which thrive, even in times of crisis.
