November has been wild for Wall Street. The week prior to the U.S. election saw equities nosedive, but since election night, the stock market has been virtually unstoppable.
The stock market really took off after Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) reported an interim analysis of their late-stage coronavirus disease 2019 (COVID-19) vaccine candidate, BNT162b2. This first look from an independent data monitoring committee showed vaccine effectiveness (VE) of over 90% for Pfizer's and BioNTech's therapeutic, which blew researchers' VE expectations out of the water.
There's still a lot of pending data, such as how at-risk groups fared and how long this vaccine provides protection, but there now appears to be a light at the end of the tunnel to the coronavirus disease pandemic. Unfortunately, that's been perceived as bad news for work-from-home stocks, which plummeted on the news of Pfizer's and BioNTech's success.
I'm here to tell you that high-growth work-from-home stocks can still thrive, even with a COVID-19 vaccine. Here are three growth stocks to consider buying on any significant weakness following this vaccine interim analysis data.
Despite getting clobbered on Monday, a COVID-19 vaccine isn't going to be able to derail Pinterest's (NYSE:PINS) momentum.
Social media stock Pinterest has certainly benefited from people having more downtime and being stuck at home, but it's not as if the company's user growth was slowing prior to the pandemic. In the most recent quarter, Pinterest tallied 442 million monthly active users (MAU), which was 120 million MAUs higher than the prior-year period. In the four years prior to the pandemic, Pinterest's MAUs grew by an average of 30% a year. This innovative and popular platform is drawing eyeballs, COVID-19 or not.
One of the keys to Pinterest's rapid growth is the company's ability to lure new international users. Though average revenue per user (ARPU) in overseas markets is considerably lower than ARPU in the U.S., Pinterest has demonstrated that it can double international ARPU many times over this decade.
Pinterest also has the makings of a burgeoning e-commerce platform. Since Pinterest's MAUs are willingly posting about the products, places, and services that interest them, it only makes sense for the company to connect these Pinners with small businesses that cater to those desires. According to the company, 89% of Pinners use Pinterest as their inspiration when making a purchase.
Pinterest can double its sales every four years, COVID-19 vaccine or not.
Another growth stock that took a beating following the new BNT162b2 data is fintech stock Square (NYSE:SQ). With cash viewed as a harbinger of germs, interest in cashless payment platforms spiked during the pandemic. This interest is going to continue well after COVID-19 is put into the rearview mirror.
Most folks probably know Square best for its point-of-sale devices that have historically targeted smaller businesses. In the eight years leading up to the pandemic, gross payment volume (GPV) traversing Square's network surged to $106.2 billion, or 49% a year.
What's noteworthy about Square's oldest operating segment is that it's not just for small businesses anymore. In the third quarter, 61% of GPV was derived from businesses with at least $125,000 in annualized GPV (i.e., medium and large businesses). Since we're talking about a business segment driven by merchant fees, bigger businesses are liable to generate more revenue for Square.
Even more impressive has been Square's peer-to-peer payment platform Cash App. In the 30-month stretch following the end of 2017, Cash App's user count more than quadrupled to 30 million, with the app becoming especially popular among young adults. Cash App enables Square to make money from transfer fees, bitcoin exchange fees, investment fees, and merchant fees. By as soon as next year, this should be Square's leading gross profit generator.
This company isn't going to take its foot off the gas, no matter what happens with a vaccine.
On Monday, Wall Street was very concerned about the potential for cloud-based companies moving forward. While the brick-and-mortar work environment was never going away, it'd be foolish (with a small "f") to think that we're going to see cloud spending slow in any meaningful way. This is especially true for cloud-focused security companies like Okta (NASDAQ:OKTA).
If the past few quarters have taught us anything, it's that cloud security is now a basic-need service. No matter how the U.S. economy is performing, hackers and robots are active. Businesses of all sizes will need security products moving forward as consumers push online and employees favor remote work environments.
Another key advantage of Okta, which specifically handles identity verification, is its reliance on artificial intelligence to drive results. Okta's machine-learning technology makes its cybersecurity solutions smarter over time, which helps the company identity threats more effectively. The quality of the company's cybersecurity solutions has played a big role in helping it sign up new clients, as well as in encouraging existing users to spend more.
It's also worth pointing out that Okta's business model is built atop subscriptions. The cybersecurity subscription model is designed to achieve high margins and reduce customer churn.
COVID-19 vaccine or not, Okta has the potential to generate consistent double-digit growth throughout the decade.