Though remote work trends got a little slippery in 2023, there’s no doubt that remote work stocks retain an advantage in today’s economy. In 2020, more than 60% of an average worker’s days were at home, and the figure dropped to about 25% in 2023. But that 25% seems remarkably sticky, meaning it’s likely to stay where it is or climb higher, and still represents a 5X jump from 2019.
Remote work stocks focus on those that employees and employers use or leverage to facilitate the “working from home experience.” While some may have fallen from past highs as the world returned to (relative) normalcy, there’s still upside as employment trends evolve.
Zoom (ZM)
Remote collaboration is the lynchpin of remote work stocks, and no stock is as well-positioned to capitalize on the trend as Zoom (NASDAQ:ZM). We all know Zoom’s core offerings backward and forward. But many still overlook its emerging suite of new tools that keep pushing the remote work trend forward.
Like many tech firms, Zoom is leveraging generative AI to improve user experiences. Last year, the remote work stock unleashed a slew of features earlier this year. The company’s AI assistant integrates with Zoom’s distinct sub-platforms, including meeting, chat, phone, email and whiteboard tools.
Zoom is also adapting its utility to make the company a one-stop shop for remote workers’ needs. Zoom’s offerings were exclusively video chatting services in pre- and mid-pandemic. But it’s now expanding its scope to build a closed ecosystem. This reduces remote worker and employer friction since users don’t have to download, pay for, and juggle multiple applications simultaneously. At the same time, it increases customer stickiness, particularly as large employers and small businesses partner with Zoom as the sole-source remote work communications provider.
Steelcase (SCS)
Sitting at the computer all day isn’t healthy. In a long-touted statistic, researchers claim that “sitting is as bad as smoking” in terms of life expectancy. Whether the statement is wholly factual is up for debate, but one thing is clear. Standing, moving and staying mobile is better than planting yourself in an office chair all day. But, sometimes, you need to sit—that’s a no-brainer. Few office supply companies have the same quality offerings that Steelcase (NYSE:SCS) boasts.
The company’s core offerings include high-end, enterprise-level office furniture. Think of a company contracted to outfit a wall of cubicles or meeting areas—Steelcase is the luxury equivalent. Remote workers increasingly turn to the company’s solid offerings to outfit their offices and take advantage of world-class seating in a comfy, home environment.
Steelcase went through turbulence over the past five years, as remote work trends impacted their initial operational model and rate hikes forced extreme cost-cutting initiatives. But, if you’re looking for a dark horse remote work stock, Steelcase could be huge if it focuses on the emerging at-home workforce more exclusively.
Upwork (UPWK)
Perhaps unsurprisingly, at-home workers are increasingly moonlighting for extra cash and sometimes abandoning traditional employment to strike out on their own. Few remote work stocks capture that specific trend, as well as Upwork (NASDAQ:UPWK). Though I don’t hold UPWK shares, I am an active user and, as a freelancer, tend to get tons of work from the platform. From that perspective, Upwork’s questionable decisions and practices provide plenty of frustration. But from a remote work stock perspective, the company’s freelancer/client marketplace position is untouchable. Upwork owns more than 50% of the total addressable market within the broad freelancing sector and tends to attract a higher-paying professional clientele than companies like Fiverr International (NYSE:FVRR).
Strikingly, Upwork has deftly maneuvered shifting economic winds to increase profitability in a bid to stay afloat. The company posted its second-ever profitable quarter in its most recent report, sending shares surging (though still well below all-time highs). Better yet, the company’s gross service volume stayed fairly steady since early 2021, indicating the company’s value proposition remains viable even amid economic clampdowns.
Upwork’s primary hurdle is in its enterprise client domain. The company’s enterprise segment growth slowed somewhat in recent months, which could indicate large company budgets don’t support freelance work as readily or, more likely, those companies are sourcing talent independently. The remote work stock’s trajectory could skyrocket if Upwork can realign its enterprise program to attract larger clients with greater sticking power.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
