The past few weeks have been brutal for the markets and mankind. When we do emerge from the other end of this COVID-19 outbreak -- and we will -- it's naive to think that things will go back to the way they were. Some industries will take longer than others to bounce back, and a couple of them will be irreparably damaged.
Education, entertainment, and healthcare are three markets that will be radically transformed when things return to some level of normalcy. Below, I'll go over how these industries will be disrupted, and offer up a stock in each market that should benefit from the transformation.
Image source: Zoom.
Education
Most schools across the country have been shuttered for at least a week, and educators everywhere are boning up on e-learning. It's awkward right now. Online classes are a poor proxy for the real thing, but give teachers some time to get this right. Internet courses have been part of the college playbook for years, but this is still a case of baptism by fire for many in the primary and secondary education industry that had just a handful of days to get ready.
Educators will figure this out. They will find ways to make their online courses more engaging for young learners. Classes won't be returning to the classroom for weeks if not months. As elementary and high school systems grow more comfortable in the realm of e-learning it will become less likely that classes will return to their conventional setting in the fall.
The schoolhouse is symbolic, and it offers the care of our youngest citizens while their parents work and go about other necessary duties. It may be insane to suggest that the traditional classroom is toast, but virtual learning -- already a reality in most school districts at the secondary level -- will grow even more popular as students get a broader taste for the platform with teachers gaining fluidity in the format.
The one stock that will rock in this tech-savvy classroom makeover is Zoom Video Communications (ZM 0.52%). Zoom seems to be at the core of most of these virtual classrooms that have been quickly cobbled together. We've had plenty of embarrassing stories of business meetings, classes, and artist performances via Zoom that have gone wrong, but the platform has delivered on its collaborative connectivity promise.
Zoom was one of the few stocks to hit new highs last week while the rest of the market was cratering, and the gains are well earned. The stock packs a nosebleed-high valuation, but growth should be explosive for Zoom through at least the next few years.
Entertainment
Movie theater chains closed early last week. You may not miss them when the ones still standing fire up their projectors again later this year. Folks were already not going to the corner multiplex with the same feverish velocity as before, but this lull has pushed studios into obliterating release windows and embracing digital delivery early in a film's bankable early days.
Studios began offering films that had just started their theatrical runs to digital audiences for as much as $20 for a limited-time rental. Normally consumers would balk at this high-priced option, but folks are stuck at home right now. They are hungry for entertainment, and all that binge-viewing will prove in the next few weeks that folks don't need to deal with the multiplex-going experience anymore.
One stock that will benefit from this shift is Roku (ROKU 1.53%). Roku began 2020 with 36.9 million active accounts, a 36% increase over where it was a year earlier. Engagement is rich, as folks are streaming roughly 4 billion hours of content a month through Roku's platform. With average revenue per user growing, and more streaming services willing to compensate Roku for helping them stand out, this will continue to be a smart way to play the streaming revolution.
Healthcare
We were ill-prepared as a nation to handle the coronavirus pandemic, but this is also a learning experience. We're now seeing how demand can topple supply in these extraordinary circumstances, and folks are struggling to get tested or find treatment solutions for COVID-19.
The deadly and contagious novel coronavirus is exposing the shortcomings of our waiting rooms and limited resources to react when demand spikes, and we may not return to the old way of doing things when it comes to healthcare.
Teladoc Health (TDOC +0.15%) is a name to watch here. The growing player in telemedicine offers a one-on-one consultation with a medical professional across a growing spectrum of specialties. The big surprise with telehealth is how slow the skeptical consumer has been to warm up to the platform. Teladoc is available to 36.7 million members through existing plans, but it was used for just 4.1 million virtual visits last year. Despite offering quick, affordable, and convenient access to medical assistance, folks still don't trust an online doctor. Less than 10% of Teladoc members actually used the platform, but that's going to change. There's nothing like an infectious pandemic to speed up the migration process, and that goes for more than just coronavirus-related concerns.
Teladoc joins Zoom as one of the handful of stocks rising during the market's sell-off, and they are among Wall Street's top stocks these days. Roku is primed to bounce back into favor as it become an obvious play on the new normal in streaming entertainment. The world is changing right now. Get up to speed on the public companies that will benefit from the disruption.
