The world appears to be done with the type of widespread coronavirus pandemic lockdowns that characterized 2020 and early 2021. However, the remote work trend isn't slowing down.
Less than half of all offices have resumed in-person work schedules by mid-February 2022, even as other parts of the economy, like restaurants and sporting events, have rebounded.
That persistent demand for a hybrid work infrastructure is great news for digital businesses. And a few of these stocks have become cheaper since late 2021. Let's look at why an investor might want to buy Airbnb (ABNB -3.18%), HubSpot (HUBS -2.82%), and Microsoft (MSFT -1.27%) right now.
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1. Airbnb
Airbnb is ready to start setting volume records again. The home rental specialist has been growing sales in recent quarters thanks to rising prices, but volume still hasn't fully recovered from the pandemic. That's set to change in the first quarter of 2022, management said in a mid-February earnings report.
Airbnb is seeing many benefits from changing travel behavior. "Remote work has untethered many people from the need to be in an office every day," CEO Brian Chesky said. That shift helped propel soaring demand for longer-term stays on its platform. The company booked 175,000 rentals last year that lasted at least three months.
Investors will be just as happy with Airbnb's improving financials. On an adjusted basis, the company's profit margin based on EBITDA crossed 27% of sales in 2021 compared to a loss of 5% in fiscal 2019. Watch for more progress on this score through 2022 and beyond.
2. HubSpot
The move into a fully digital workflow has created something of a gold rush for companies that can help their clients perform that change. One standout stock in this space is HubSpot, which provides software for marketing, sales, and customer service.
Revenue grew nearly 50% in the most recent quarter and throughout 2021, thanks to accelerating demand from small- and medium-sized businesses. HubSpot aided these customers with a growing portfolio of marketing, payment processing, and customer relationship management services. That success showed up in strong sales growth, high renewal rates, and rising contract values.
HubSpot is aiming to grow sales by over 30% in 2022 as it pushes profit margins higher by at least two percentage points. With major growth avenues available, including outside the U.S., its customer footprint -- and earnings power -- should be much higher five years from now.
3. Microsoft
Sometimes the best investments are hiding in plain sight. Microsoft shares have trounced the market over the last three years and, at over $2 trillion in market capitalization, it's no secret on Wall Street.
But look at what you get when you buy shares of the software titan. Microsoft added $8 billion, or 20%, to its sales base in the most recent quarter. Earnings expanded even faster thanks to accelerating demand for cloud services.
Management isn't exaggerating when they describe how the remote work transformation can lift productivity for businesses and consumers. CEO Satya Nadella said in late January, "Digital technology is the most malleable resource at the world's disposal to overcome constraints and reimagine everyday work and life."
Nadella and his team are projecting another good year ahead across business units like cloud software, business services, and gaming. Gushing cash flow should support a rising dividend and stock buyback spending. These factors are likely to keep investor returns high in 2022 and beyond despite the stock's rally over the last few years.
Sure, Wall Street has lost interest in many of the digital-focused stocks that soared in earlier phases of the pandemic. But investors can still find attractive opportunities in this fertile growth category.
