The market's worst day in two years was brutal, but not every stock went down on Monday. Zoom Video Communications (ZM -3.03%), Peloton (PTON 1.93%), and Teladoc Health, Inc. (TDOC 0.32%) moved higher in the otherwise brutal market in which the 30 Dow Jones Industrial Average companies moved lower.
Fears of the growing reach of the COVID-19 coronavirus spooked investors on Monday. It's only fitting that three of the rare winners are now being seen as niche plays that will excel in this dicey climate. Let's take a closer look.
We've seen major companies bow out of global industry conferences on coronavirus concerns. Giorgio Armani chose to stage his Milan Fashion Week show without an audience over the weekend, choosing instead to livestream his latest apparel collection. But business doesn't stop just because folks are wary of meeting in person.
Videoconferencing is the obvious solution for folks to meet without having to exchange physical pleasantries, and it just so happens that Zoom was a scorching-hot growth stock before companies started scaling back on their corporate travel plans and leaning on its platform. Revenue soared 85% in the fiscal third quarter that ended in October. Its guidance calls for top-line growth slowing to a 65% to 66% clip in the fiscal fourth quarter, which it will report next week, but Zoom has been historically conservative with its outlooks.
Another Monday gainer that makes perfect sense is Peloton. The provider of big-ticket treadmills, stationary bikes, and subscription video workouts is an obvious winner of a virus scare. Folks that want to avoid going to a crowded gym or spinning class will still want high-octane workouts.
Peloton is another company that was growing at a heady clip before this new potential tailwind. Revenue soared 77% in its latest quarter. The number of connected fitness subscribers paying monthly premiums to Peloton has nearly doubled over the past year. Customers appear to be hooked, going by the low 0.74% monthly churn rate, but that's also not a surprise after they've made initial four-figure investment in the hardware.
Despite Peloton's success, the stock is still trading below the $29 price it went public at five months ago. There are always heightened risks when investing in IPO stocks. However, with a lot of people considering going in-house with their workout regimens, Peloton's future prospects are bright.
Telemedicine for the masses has finally arrived, and just in time for folks not wanting to risk catching something in a doctor's waiting room. Teladoc is a leading provider of online video consultations with a growing network of medical professionals. It won't report financial results until after Wednesday's market close, but it expects to have virtually treated roughly 4 million patients worldwide last year.
Teladoc is the slowest growing of the three Monday risers, but revenue still climbed at a healthy 24% clip in its previous quarter. There will always be limitations to telemedicine, but as Teladoc expands its offerings it will benefit from its win-win proposition of providing immediate and convenient care for a lot less than an in-clinic visit with a local specialist.