When the pandemic began, it was apparent that the economic shock would be almost impossible to measure. It was therefore inconceivable that some companies might actually do better in such an environment, but those doubts were swiftly dismissed, thanks (mostly) to technology. 

As parts of the U.S. start to recover from the crisis, new COVID variants are proving difficult to manage in some places -- with the reintroduction of restrictions in California, plus some old restrictions upheld in Florida. If the market gets spooked, Activision Blizzard (NASDAQ:ATVI) and Match Group (NASDAQ:MTCH) are two companies that did well in 2020 and could return to those highs. 

Young person sits on the couch at home beside a dog while playing video games.

Image source: Getty Images

1. Activision Blizzard

Gaming was a popular, growing trend long before COVID-19 came along, but confine enough people to their homes, and you set the perfect scene for a surge in the industry. Activision Blizzard owns some of the hottest assets in the gaming world, like Call of Duty, World of Warcraft, and Candy Crush. Each one is a brand on its own, and they all experienced a boost in engagement during the pandemic -- with the enthusiasm spilling over into 2021. 

The Call of Duty franchise saw over 100 million monthly active players for the whole of 2020 -- the highest number ever. Additionally, franchise net bookings (the combination of digital and physical products sold) almost doubled compared with the prior year -- with growth continuing in the first quarter of 2021. 

The result was record full-year 2020 revenue, with the first quarter of 2021 also beating the company's expectations:

Metric

Full-Year 2019

Full-Year 2020

Q1 2021

Revenue

$6.48 billion

$8.08 billion

$2.27 billion

Earnings per share

$1.95

$2.82

$0.79

Data source: Activision Blizzard.

First-quarter 2021 revenue was 27% higher compared with Q1 2020, and an impressive 12.9% more than the company had anticipated. Activision issued guidance for its Q2 earnings release due on Aug. 3, and it expects $2.1 billion in revenue and $0.81 in earnings per share -- which puts full-year revenue on track to reach over $8 billion again in 2021.

Analysts expect the company to earn $3.77 per share this year, representing 33% growth over 2020. With a current share price of $90, the stock trades at 24 times projected earnings -- which is cheap compared with its competitor Take-Two Interactive, which trades at 37 times 2021 projected earnings.

2. Match Group

Match Group is best known as the parent company of Tinder, the largest smartphone-based dating app in the world, where users ''swipe'' each other in the hope of finding a match. When society was locked down, opportunities to partake in traditional dating went out the window -- and this led to a major boost in app-based alternatives. 

In March 2020, when lockdowns began in full force, Tinder users generated 3 billion swipes in a single day -- the highest number ever recorded. The app also observed its users chatting for longer periods of time, with the length of conversations up 10% to 30%. These are indications that when people are confined to their homes, it doesn't slow demand for dating -- it just shifts it online. 

Match Group delivered its highest-ever full-year revenue result in 2020, and the growth has carried through to the first quarter of 2021: 

Metric

Full-Year 2019

Full-Year 2020

Q1 2021

Revenue

$2.05 billion

$2.39 billion

$667 million

Earnings per share

$2.08

$0.49

$0.57

Total average paying users

9.8 million

10.9 million

11.1 million

Data source: Match Group.

The first-quarter result was 23% higher year over year, which was an acceleration versus the 17% growth achieved for the full-year 2020 (compared with 2019). The downside is that the company struggled to convert the 2020 revenue growth into earnings per share (EPS), but that appears to have changed in Q1 with a strong result. Moreover, analysts expect $2.27 in EPS this year.

The stock currently trades at 67 times 2021 estimated earnings, which is on the expensive side. But the company is growing nicely, and investors may continue paying a premium if the dating environment once again shifts more online -- in Match's favor. 

The present COVID surge may not result in the same widespread lockdowns, but if we see greater restrictions in specific areas, or if consumers are more hesitant to go out, it could be another tailwind for app-based dating.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.