Okta (NASDAQ:OKTA), Zoom Video Communications (NASDAQ:ZM) Slack Technologies (NYSE:WORK), Teladoc Health (NYSE:TDOC), and DocuSign (NASDAQ:DOCU) are all technology stocks promising to make our lives easier by facilitating work from home (even for doctors, in the case of Teladoc).
In theory, these five companies are the ones you'd expect to be least affected by the rapid spread of the COVID-19 coronavirus -- or in a logical world, perhaps even the stocks most likely to benefit from the services they bring to a nervous market.
No such luck on Monday. As of 3:10 a.m. EDT, shares of Okta were down 6.3%, Zoom 6.1%, Slack 8.9%, Teladoc 5.8%, and DocuSign 6.2%.
Scanning the news feeds for all five stocks shows that there were no reports this morning to explain why any of these five stocks should be down today. In fact, Zoom unveiled a new Referral Partner Program that promises to expand the market for its Zoom Phone.
Nevertheless, it's all coronavirus fear, all the time.
There's also Russia and OPEC feuding over the cost of oil. But again, that's not really something that would be expected to crater the stock prices of work-from-home companies that facilitate employees and contractors collaborating without regard to location.
Instead, what we're seeing here is a global health scare that's panicking stock investors globally as well.
There are reasons to be leery of each of these stocks. With the exception of Zoom, none of the five are profitable on a GAAP basis -- not good for a business in a world verging on recession. (And even Zoom's only just barely profitable.)
That being said, four of the five companies (all but Slack) are generating positive cash profits in the form of free cash flow. And that's really the most important factor to consider when evaluating a company's ability to survive an economic crisis (assuming that's what this health crisis is morphing into).
If they can keep that cash flowing, I expect at least four of these five companies to emerge at the end of this crisis -- perhaps not entirely unscathed, but at least still alive.