Zoom Video Technologies and Docusign both reported earnings last week. Most investors might expect the two companies to be quite correlated in a mid-pandemic, work-from-home world. Instead, the two stocks had almost the opposite price-action. One big gap-up, the other a massive gap-down, neither seeing much mean reversion through Friday’s pre-labor day, long-weekend close.
What happened? Which one will feel more of an impact from the vaccines, booster shots, and the Delta-variant? This is a case where the simple revenue and EPS numbers don’t tell the full story. The City Signal financial analysis team digs deeper into this pair of 2021Q2 reports.
Day-After Price Action for Zoom and Docusign
According to CNBC Stocks, Zoom Video Technologies shares fell 12% in extended trading on August 30, 2021. The video-calling software maker reported fiscal second-quarter earnings that showed slowing growth versus the previous quarter. Zacks report indicates they are still impressed with the growth.
DocuSign, which offers the world’s #1 eSignature solution as part of the DocuSign Agreement Cloud, released their 2nd quarter report. They indicate higher numbers in every area. Sales, revenue, and stock prices are all on the rise. The Zacks report on DocuSign indicates that it has shown unexpected growth in the last 4 quarters.
The Pre-Covid and Early Lockdown Ascent
Zoom and DocuSign have both been showing impressive gains in 2020 and 2021. The COVID-19 crisis caused home quarantine for so many people, which both of these programs have benefitted from. Zoom meetings exceeded projected popularity as people preferred to meet online, instead of in person. All types of users participated in Zoom meetings. The only reason Zoom numbers were down for this quarter was because school was out for summer.
For the previous quarter, Zoom meetings were at an all-time high, as students were not attending schools and were obtaining their education online via Zoom meetings. Students turned to online tools to meet with their classmates or teachers. As the school year for 2021-2022 restarts, live classroom attendance has become common once more. Of course, the pandemic isn’t necessarily over. How this will affect Zoom will be seen by the next quarterly report.
Sector Specific: Real Estate vs Education
The real estate market has been using Zoom heavily, too. Zoom allowed homeowners and realtors to discuss their options and explore properties. Realtors and home purchasers were able to meet and discuss deals without having to meet in an office setting–or a property up for grabs.
DocuSign has seen an unprecedented increase for the same reason. COVID-19 has increased the number of home sellers and home buyers that do not want to make one-on-one transactions. They prefer the luxury of signing documents online and securely without personal contact.
DocuSign gives the realtor, the seller, and the buyer that privilege. Each party involved in a real estate deal receives secure logins and identity confirmation. All of the people involved must verify their identity, and then can virtually sign the contracts. This has been extremely beneficial in pandemic but is also useful for anyone that is not available to personally appear to sign the contract documents–like out-of-state buyers.
Growth Beyond the Remote-Work Era
DocuSign has a specific division set up for the real estate market. DocuSign for Real Estate has the paperwork necessary for buy/sell in the real estate market. They specialize in security to keep homeowners and buyers comfortable. This virtual platform also makes the paperwork process simpler for realtors.
Both of these programs have proven to be very beneficial in the real estate market, as COVID-19 continues to make the public fearful of meeting people in person. So, although Zoom meetings allow realtors to stay in touch and conduct virtual apartment tours, DocuSign is a growing trend that will persist far past the pandemic. Real estate investors are increasingly seeing entirely electronic transactions, and DocuSign enables all parties to review and sign related documents–all in the convenience of their home or office. Even without a pandemic, we all prefer our crucial documents logged securely in the cloud, free from damage from hurricanes, floods, and other natural disasters.
Mr. "Hud" Chavij recently came from abroad and brought with him a level of determination and creativity that instantly gained him a reputation among the NYC real estate thought leaders.