Upwork Global, Inc.’s (UPWK) stock has advanced sharply in 2020 after a rocky start. The provider of online recruitment services was recently added to the WhaleWisdom Whale Index on August 17, 2020. The addition was due to hedge funds that were actively buying the stock in the second quarter. As a result, Upwork has overall outperformed the S&P 500 year-to-date, rising by approximately 56.5% in comparison to the S&P’s gain of about 2.1%.

Upwork is an American freelancing platform that offers jobs spanning many careers, from website developers to accountants. The company appears to be moving beyond the negative impact of the coronavirus pandemic, which brought so many businesses to a temporary halt in the spring. Now Upwork has the potential to capitalize on a shift to a remote workforce, resulting from the pandemic.

Hedge Funds and Institutions Are Buying

Upwork has hedge fund managers and institutions taking notice. Looking at the second quarter activity by the top hedge funds, the aggregate 13F shares held jumped to about 27 million from 24.7 million, an increase of approximately 9.3%. Of the hedge funds, 23 created new positions, 11 added to an existing holding, 16 exited, and 19 reduced their stakes. Overall, institutions increased their aggregate holdings by about 13.7%, to approximately 71.9 million from 63.3 million.

(WhaleWisdom)

Projected Losses Despite Revenue Growth

Analysts anticipate that earnings will narrow slightly over the next few years, rising from a loss of $0.32 per share in 2020 to a loss of $0.15 in 2023. However, revenue will see multiple years of growth, rising to $545.5 million in 2023 from $353.85 million in 2020.

Analysts Share Mixed Feelings

While overall, analysts appear to gravitate towards a Buy rating for Upwork, there are some mixed thoughts, especially after second-quarter results and a transition in leadership. Upwork welcomed a new CFO in August and a loss in earnings despite marketplace revenue being up approximately 19%. MKM Partners LLC’s analyst, Rohit Kulkharni, sees potential for Upwork, noting that the company has only begun to capitalize on an economy that’s more open to a workforce of remote and on-demand workers. MKM gives Upwork a Buy rating and a $20 price target. Meanwhile, Citigroup, Inc. downgraded Upwork from a Buy to Neutral rating, giving it a price target of $12.

Optimistic Outlook

The future holds promise for Upwork. The company continues to weather the pandemic and seize new opportunities from changing workforce preferences. Hedge funds and institutions are buying, while many analysts are optimistic on the long-term growth story. That may prove to be a winning formula for a higher stock price in future years.

Peloton Interactive Inc.’s (PTON) stock has experienced impressive growth over the past six months, after a brief dip in February 2020. Peloton has outperformed the S&P 500 easily, rising approximately 216% while the S&P 500 rose by about 2.75% as of September 18. The strong performance has landed Peloton on the WhaleWisdom Heat Map with a ranking of twenty and garnered the attention of hedge fund managers.

The exercise equipment and media company has faired very well during the coronavirus pandemic, despite the temporary forced closure of its retail stores and studio classes during the quarantine. While quarantine has been an inconvenience, it has led to many Americans telecommuting and seeking alternative exercise options outside of fitness centers.

(WhaleWisdom)

Strong Results

Peloton is seeing favorable activity from hedge funds and institutions. Looking at second-quarter activity by the top hedge funds, the aggregate 13F shares held increased to approximately 52.1 million from 45.5 million, a jump of about 14.7%. Of the hedge funds, 39 created new positions, while 28 added to an existing one, as 11 exited, and 27 reduced their holdings. Institutions were also buying, and overall, institutions increased their aggregate holdings by about 43.5%, to approximately 168.7 million from 117.5 million.

(WhaleWisdom)

Positive Estimates

Analysts project Peloton’s revenue will grow by approximately 97.2% in the fiscal year 2021, to $3.6 billion in revenue. Year over year revenue growth is forecast to continue at an annual pace of around 30% for 2022 and 2023. There is more good news for the shares, with an expectation that earnings will then rise to $0.30 by June 2021 and ultimately to $1.59 by June 2023.

Analysts Share Favorable Forecasts

Stifel Financial Corp.’s analyst, Scott Devitt, has a favorable outlook for Peloton, seeing it as the “Apple” of fitness, giving it a buy rating and a price target of $120. Most of Peloton’s revenue is generated from connected fitness products and product subscriptions. Needham & Co.’s analyst, Dan Medina, also gave the company a buy rating, recognizing the appeal of Peloton’s integration of hardware, software, and content. Oppenheimer & Co., Inc. increased its price target to $105, up from $50, maintaining an outperform rating. Goldman Sachs Group, Inc. expects strong performance and gives Peloton an impressive price target of $138, while Bank of America Corp. issued a price target of $116.

Bright Outlook

Peloton is positioned to continue to benefit from the pandemic’s influence on consumer fitness choices. The rising popularity of at-home workouts in place of traditional gyms has increased demand for Peloton’s fitness products and subscriptions, a trend that could continue beyond the pandemic. Analysts’ estimates for Peloton’s continued growth are appealing for investors of this stock and is likely why hedge funds and institutions have been moving into the shares.

Hilton Worldwide Holdings Inc. (HLT) stock has suffered starting in March and April due to the coronavirus pandemic. Still, Hilton was added to the WhaleWisdom Index on August 17, 2020, despite the stock falling roughly 21.2% on the year. It is a steep loss for the shares, while the S&P 500 has outperformed, gaining approximately 3.4%.

Hilton owns hotels, resorts, and timeshare properties throughout the world. The pandemic caused a downturn in travel and restrictions on group gatherings that greatly impacted Hilton’s business, from individual hotel and wedding venue bookings to corporate conferences. The pandemic has had a negative impact on Hilton’s financial performance and the hospitality industry as a whole.

Hedge Funds Are Buying

Hedge funds were active in the second quarter, and the aggregate 13F shares held rose to about 93.9 million from 90.6 million, an increase of approximately 3.6%. Reviewing hedge fund activity, 40 created new positions, 39 added to existing holdings, 29 exited, and 32 reduced their stakes. In slight contrast to hedge funds, institutions were selling. Overall, institutions decreased their aggregate holdings by about 0.6%, to approximately 273.8 million from 275.6 million.

(WhaleWisdom)

Encouraging Estimates Beyond 2020

Analysts estimate that Hilton’s revenue will plunge in 2020 by approximately 48%. Fortunately, revenue is forecast to rebound in 2021 by 55.8% to $7.66 billion and an additional 19.9% in 2022. Meanwhile, earnings are forecast to drop 92% in 2020 to $0.32 per share and then jump to $2.36 in 2021 and $3.58 in 2022.

Optimistic Forecasts

Analysts like UBS Investment Bank are optimistic about the stock, keeping a Buy rating and giving Hilton a price target of $104. Additionally, PIMCO Investment Management’s chief investment officer (CIO) also has a positive attitude towards companies like Hilton, as they believe the travel and tourism sector will ride out the pandemic.

Hope for Hilton

Hilton’s long-term earnings growth and future estimates are encouraging for investors, with optimistic analysts anticipating a rebound from the pandemic within two to three years. While this does not eliminate the uncertainty of the pandemic’s end and the dark cloud it created over the hospitality industry, there’s hope for this hospitality giant after a rough start to the year.

If the industry can recover as many analysts expect, then hedge funds may find themselves on the winning side of this trade.

Adobe Systems Inc.’s (ADBE) stock has steadily advanced over the past five months, with the shares rising by about 50% since the start of 2020, outperforming the S&P 500’s gain of approximately 6.9%.

Adobe is a multinational computer software company offering a variety of multimedia and creativity software products, with revenue segments including digital media, digital experience, and legacy publishing products.

Adobe appears to have been minimally affected by the coronavirus pandemic, while many other companies and industries have seen a negative impact. More recently, investors have noted that Adobe is benefitting from the shift to telecommuting, as there has been a higher demand for digital products such as Document Cloud, which includes Acrobat PDF, Scan, and Sign products.

WhaleWisdom Results

Adobe was added to the WhaleWisdom WhaleIndex 100 on August 16, 2020. However, despite Adobe’s improved performance in 2020 to date, hedge funds and institutions overall were selling the stock in the second quarter, causing Adobe to slip on the WhaleWisdom Heat Map to a ranking of 36 from a previous ranking of 18. Adobe saw its stock value increase as businesses have been driven by the pandemic to increase remote work and collaboration dramatically.

(WhaleWisdom)

Uninspired Hedge Funds Despite Earnings

Adobe has more recently left hedge fund managers and institutions feeling lukewarm. Looking at activity by the top hedge funds in the second quarter, the aggregate holdings decreased to about 84.7 million from 90.5 million, a mild decrease of approximately 6.4%. Of the hedge funds, 51 created new positions, 123 added to an existing one, 46 exited, and 134 reduced their holdings. Institutions were also selling, lowering 13F shares to 400.7 million from 406.3 million, a decrease of about 1.4%.

(WhaleWisdom)

Encouraging Multi-year Growth

Analysts have optimistic revenue and earnings estimates for the next several years, with expectations that earnings will rise year-over-year from 2020 through to 2023. Increases range from approximately 14.1% in 2020 to 7.3% in 2023. These significant year-over-year growth estimates would bring earnings to $12.98 per share in 2023, up from $9.73 for 2020. Additionally, revenue is forecast to climb as well, rising to $18.2 billion by the year 2023 from estimates of around $12.8 billion in 2020.

Positive Overall Outlook

Adobe’s steady growth and future estimates are encouraging for investors. While Adobe continues to face its fair share of competition from other software and digital marketing companies, the digital media leader continues to see increased pandemic related demand for its products. That should help to drive the stock higher for some time to come.

Zoom Video Communications, Inc. (ZM) has experienced soaring growth over the past seven months, dramatically outperforming the S&P 500, leaving it in its dust. The communications technology company moved up on the WhaleWisdom Heatmap to an impressive ranking of three in the second quarter. Hedge funds and institutions have been actively buying Zoom in 2020, resulting in a gain of approximately 339%, compared to the S&P’s increase of about 7.9%.

(WhaleWisdom)

Consumer demand for Zoom’s cloud-based software platform and online communication tools has increased dramatically due to the coronavirus pandemic, and the need for telecommuting and online education. Families, groups of friends, and social clubs have been turning to communication tools such as Zoom to create real-time connections while social distancing. While many companies have been negatively impacted by the pandemic, for Zoom, there have been lucrative opportunities for a new and expanded customer base.

Zoom Takes Center Stage

Zoom has the attention of hedge fund managers and institutions. Looking at activity by the top hedge funds in the second quarter, the aggregate 13F shares held increased to about 35.7 million from 26.9 million, an increase of approximately 32.3%. Of the hedge funds, 60 created new positions, 34 added to existing holdings, 23 exited, and 33 reduced their stakes. Institutions were also buying, with aggregate holdings increasing by about 30.5% to approximately 107.1 million from 82 million.

(WhaleWisdom)

Revenue on the Rise

Analysts see immense growth for the company, with earnings estimated to climb to $1.57 per share in 2022, up from $0.35 for 2020. Revenue is predicted to reach approximately $2.8 billion in 2022, up from estimates of $622.7 million in 2020.

Favorable Forecasts

Analysts are optimistic about Zoom overall. KeyBanc Capital Markets, Inc.’s analyst, Alex Kurtz, has a favorable outlook for Zoom’s stock, likely recognizing that the demand for collaboration and chat services will continue to be high as the world’s efforts to distance continue during the pandemic, and potentially beyond. Kurtz notes, that while many new Zoom accounts were opened in the summer, some decline is likely to be seen at this stage of the pandemic. Kurtz maintains a Sector Weight rating on the shares. RBC Capital Markets’ analyst, Alex Zukin, raised the stock’s price target to $300 from $250, maintaining an Outperform rating and citing that monthly active users and App downloads are well above historical averages.

Positive Outlook

Zoom’s impressive growth and future estimates are encouraging for investors. While Zoom continues to face its fair share of competition from other tech companies, and growth may not be able to continue at the current rate, Zoom has undoubtedly benefited from the pandemic, becoming a household name. That brand recognition can go a long way, and the circumstances of the pandemic have influenced consumer practices to include Zoom in their work, learning, and day-to-day personal lives.