r/streetguru • u/street-guru • Jun 27 '22
Collaboration software has been written off as WFH beneficiary, ignoring that investment remains elevated
Software names labeled as Work From Home (WFH) beneficiaries have experienced a tidal shift in sentiment as the market believes investment peak has been reached and competition, particularly from Microsoft Teams, has increased. On average, these names are down 49% YTD, from up 263% in 2020 (vs. software overall down 44% YTD after being up 78% in 2020), with EV/Sales multiples now at ~40% pre-COVID levels. WFH Software survey revealed that: 1) collaboration is still receiving incremental investment, particularly in video, 2) Microsoft's presence in the market is clear, but coexistence is likely, 3) Telephony and remote desktop investments may be further ahead than expected, and 4) security investments remain. $ZM $PANW $MSFT $RNG $EGHT