CrowdStrike Holdings (CRWD) – Get Report, DocuSign (DOCU) – Get Report, and other work-from-home stocks were climbing Tuesday after Zoom Video Communications (ZM) – Get Report shattered Wall Street’s earnings expectations.
Shares of CrowdStrike were climbing 7.0% to $134.54, while DocuSign was up nearly 11% to $247 in pre-market trading.
CrowdStrike is scheduled to report its July quarter results on Wednesday, while DocuSign is slated to report its July quarter earnings on Thursday.
In addition, Slack Technologies (WORK) – Get Report was advancing 6.5% to $34.98, while cloud security Zscaler (ZS) – Get Report was rising 3.3% to $148.
Jefferies analyst Brent Thill called CrowdStrike “a great company” on Tuesday and “one of the biggest beneficiaries” from work-from-home trends.
Thill, who has a hold rating and $115 price target on the company, said the “only issue” with CrowdStrike is valuation given that the shares are up 152% year-to-date.
The analyst questioned what level of results will be good enough to sustain “such a meteoric stock appreciation.”
Last week, Citi analyst Walter Pritchard boosted his price target on DocuSign to $250 from $168, while keeping a buy rating on the shares.
Pritchard said he believed the shares are “priced for outperformance” in the second quarter and the fiscal year “but reflect more normalized growth trends” in the second half of 2021.
Work-from-home related companies saw their business increase dramatically due to the coronavirus pandemic shutdown, which forced employees to leave the office to satisfy social distancing guidelines.
On Monday, online meeting and collaboration platform provider Zoom reported total sales of $663.5 million, up 355% year-over-year and well ahead of an analyst consensus of $500 million. Its non-GAAP net income came in at 92 cents per share, above a consensus of 45 cents.
“Organizations are shifting from addressing their immediate business continuity needs to supporting a future of working anywhere, learning anywhere, and connecting anywhere on Zoom’s video-first platform,” said Zoom CEO Eric Yuan in a statement.
For the current quarter, Zoom expects total revenue of between $685 million and $690 million and non-GAAP income of 73 or 74 cents.
For the full fiscal year, Zoom raised its sales guidance to between $2.37 billion and $2.39 billion, representing a year-over-year increase of 281% to 284%, alongside earnings of between $2.40 and $2.47.
Zoom’s prior full-year sales guidance, issued in its first-quarter earnings release, was between $1.775 and $1.8 billion.