COVID-19 put these companies ‘on the map’

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While COVID-19 wreaked havoc on a range of U.S. industries including restaurants, airlines, hotels, and brick-and-mortar retail, the pandemic drove record revenue for certain companies and, in some cases, even put them on the map in 2020.

“Work from home companies will forever be known in investors’ minds because of the pandemic,” Dan Ives, technology sector managing director and senior equity research analyst for Wedbush Securities, told Yahoo Finance, weighing in on businesses that became household names in 2020 due to government shutdowns and stay at home orders.

“It put companies like Zoom (ZM), Slack (WORK), DocuSign (DOCU), among others, on the map. The hall of fame winners during this dark period of time, from a stock perspective, have really been those three. I don’t believe Salesforce (CRM) acquires Slack, if COVID-19 never happened,” Ives added, referring to the $27.7 billion deal announced on Dec. 1.

Cybersecurity and cloud computing firms, Ives said, are also among the biggest beneficiaries of the pandemic, including Zscaler (ZS), CrowdStrike (CRWD), Palantir (PLTR), and Okta (OKTA).

Outside of straight technology plays, Loup Ventures’ managing partner Gene Munster places digital fitness newcomer Peloton (PTON) among 2020’s success stories arguably tied to shutdown restrictions.

“I think Peloton still was pretty nascent before the pandemic,” Munster said, noting the company’s total revenue growth of 100% year-over-year, reaching $1.8 billion in fiscal year 2020. And the company’s surge in usage, Munster said, could represent a sustainable shift to working out at home. “They couldn’t have done that before the pandemic,” he said.

‘Uber Eats has been a major savior’

DoorDash (DOOR), which went public in December, also gained newfound significance this year by bringing restaurant meals to people’s homes when many establishments were closed for in-door dining. “DoorDash would be another one where a lot of people weren’t familiar with it [pre-pandemic],” Munster said.

During its first few weeks of trading, the company’s stock has moved off of its high of $195.50 and was trading at $158.22 as of Wednesday’s market close.

Zoom meetings have become acceptable during the pandemic. Image: Getty
Zoom meetings have become acceptable during the pandemic. Image: Getty

For Ives, Uber Eats (UBER), in addition to DoorDash, owes this year’s revenue boost to pandemic-created consumer lifestyle changes. The two food delivery services, known for years to urban dwellers, have expanded their consumer bases well into the suburbs where they previously held little traction. Growth rates for the services, Ives said, have surged 200% to 300%, in part because many consumers rely exclusively on food delivery.

“And then of course, UberEats, in a year where [Uber] rideshare experienced headwinds, UberEats has been a major savior,” Ives added.

A drug company leaps onto investors’ radars

At least one company working directly on the pandemic response leapt onto investors’ radars this year. Vaccine developer Moderna (MRNA) earned recognition among established pharmaceutical giants with its development of a COVID-19 vaccine, granted Emergency Use Authorization by the Food & Drug Administration in December.

Other honorable mentions, Munster said, include healthcare startups. One startup, Peak, sends prescription testosterone medication through the mail, while another, Levels, recommends personalized diets based on blood sugar levels and metabolism.

Fundamentally, Munster said many of 2020’s most fortunate companies are tapping into behaviors that were largely unacceptable before the pandemic — including Zoom, which has normalized remote meetings. Similarly, many consumers would have never considered ordering groceries and meals online, in place of a trip to the store, or substituting their gym visits for an in-home stationary bike.

In an interview for a story on Peloton’s growth in 2020, Pam Mitchell, a producer for Yahoo Finance Live and fitness enthusiast, said she would not have bought her Peloton if it weren’t for COVID-19.

“I didn’t see a need for it pre-pandemic,” she said, in a statement that could apply to many of the companies that benefited the most in a year that destabilized much of the U.S. economy.

See also:

Etsy seller: ‘2020 was one of the best years. I’ve ever had’

IPOs to watch in 2021: The 5 most anticipated debuts

Winter is coming, and we’re all going back to Zoom

Alexis Keenan is a reporter for Yahoo Finance and former litigation attorney. Follow Alexis Keenan on Twitter @alexiskweed.

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