The trend of working remotely has really accelerated since the COVID-19 pandemic. Even though the economy has already reopened, not all workers have returned to the office.
And that is costing big money for the financial capital of the world — New York city.
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According to Bloomberg’s analysis of data from Stanford University economist Nicholas Bloom’s WFH Research team, workers coming into Manhattan — often called ‘the heart’ of New York city — are spending at least $12.4 billion less a year because they are spending about 30% fewer days in the office.
$12.4 billion is a big number, but that also means employees could be saving a lot of money by not having to commute to the office every day. Research-based consulting firm Global Workplace Analytics estimates that due to reduced costs for travel, parking and food, workers can save between $600 and $6,000 a year by working from home half the time.
This trend is fueling growth at companies that provide the necessary tools for people to work remotely. Here’s a look at three of them. Wall Street also sees upside in this trio.
Zoom Video Communications
When meetings and classes moved online due to the pandemic, business at Zoom Video Communications (ZM) flourished.
But as the economy reopened, there have been concerns about the growth potential of this video communications company. It didn’t help the case that sentiment towards tech stocks in general wasn’t exactly bullish in 2022.
Over the past 12 months, Zoom shares have fallen a painful 38%.
And that could give contrarian investors something to think about. Zoom had approximately 209,300 enterprise customers as of Oct. 31, 2022, up 14% year-over-year.
If the hybrid work environment is here to stay, it would be good news for Zoom.
RBC Capital Markets analyst Rishi Jaluria has an ‘outperform’ rating on Zoom and a price target of $95 — roughly 30% above the current levels.
DocuSign
DocuSign (DOCU) is a company known for its eSignature solution that allows different parties to securely sign agreements without having to be in the same room.
Its remote business offerings have naturally come in handy over the pandemic-stricken years.
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On Jan. 31, 2020, it had 589,000 customers. By Oct. 31, 2022, it had 1.32 million customers worldwide.
Despite expanding its customer base, the company hasn’t been a market darling. Shares have tumbled by more than 40% over the past year.
Jefferies analyst Brent Thill has a ‘buy’ rating on DocuSign and a price target of $70 — about 17% higher than where the stock sits today.
Box
Box (BOX) is a cloud-based content management, collaboration and file sharing service company.
Unlike the other two names on this list, Box is not a beaten-down stock. In fact, shares have surged 38% over the past 12 months.
Business is booming. In fiscal Q3, Box’s revenue grew 12% year over year to $250.0 million. Excluding the impact from exchange rate fluctuations, top line growth would have been 17%.
The company is also returning cash to investors through buybacks. In fiscal Q3, Box spent approximately $29 million repurchasing 1.1 million of its shares.
Morgan Stanley analyst Josh Baer sees better days ahead for Box. Baer has a ‘buy’ rating on the company and a price target of $39, implying a potential upside of 16%.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Source: https://finance.yahoo.com/news/remote-costing-heart-nyc-12-150000735.html