There's never a dull week on Wall Street these days. Some companies will be making headlines as we head into the final month of 2020, and they definitely bear watching.
One of this year's hottest stocks will get its final chance to blow the market away this week. Zoom Video shares have soared 593% in 2020 through Friday's close, and bulls will argue that the upticks have been more than earned.
Zoom started the year as a growing but obscure videoconferencing platform. It has exploded into a household name that has redefined the way companies meet, students learn, and families gather. Analysts see revenue more than quadrupling -- up 316% -- for the fiscal third quarter that it will report shortly after Monday's market close. Zoom's adjusted net income is expected to pop more than eightfold.
As lofty as Wall Street's goals may seem, Zoom has been a rock star. Its profit has more than doubled analyst expectations every quarter over the past year. It has boosted its guidance. There may be some concerns about Zoom's starring role in our lives once the pandemic is a thing of the past, but it will probably never stop playing an important part in how we communicate in the future.
Investors will be watching Nikola a little closer than usual this week. The stock's lock-up restrictions expire early this week, freeing insiders that have held on since the electric truck designer's IPO six months ago to bail on the stock.
There are certainly some good reasons to sell. Since hitting the market via the special purpose acquisition companies -- or SPAC -- route we've seen its founder CEO resign under fraud allegations and skeptics wonder how long it will truly take Nikola to get its flagship Badger super-truck on the road. The shares have been rallying along with other electric vehicle stocks. Why wouldn't insiders take some profits with this very volatile stocks?
One thing to keep in mind here is that short interest keeps clawing its way to fresh highs, so a short squeeze is certainly possible. If insiders don't sell on Tuesday it could lead to a rally -- and more shorts closing out their positions -- later in the week. No matter how you slice it, the risks are high here.
Zoom isn't the only high-flying pandemic play reporting fresh financial results this week. DocuSign will step up with its fiscal third-quarter results on Thursday afternoon. The stock has more than tripled in 2020 as we head into the final month of trading.
DocuSign isn't growing its business at the same freakish pace as Zoom, but growth is accelerating for the second year in a row. The COVID-19 crisis has sped up the migration away from ink signatures to the e-signature market that DocuSign dominates.
Wall Street sees quarterly revenue climbing 45% on Thursday. DocuSign should be able to beat analyst bottom-line targets, because like Zoom it's been landing well ahead of where the pros are perched.
Zoom, Nikola, and DocuSign have a lot going on these days. The market's warming up to them as growth stocks, and investors will definitely be paying attention to all three companies this week.