HOW TO PLAY IT

According to David Mazza

High-growth online communication and productivity stocks have been hit hard but now trade at reasonable valuations. If you missed out on pandemic darling Zoom Video Communications, it’s down 80% from its fall 2020 peak. For its latest fiscal year, revenue grew 55% to $4.1 billion and net profit doubled to $1.4 billion. Zoom is trading at 26 times earnings. Twilio, a cloud company behind the software that notifies you when your Uber is approaching, and Atlassian, a team collaboration tool for coders and project managers, have also both declined sharply despite strong growth. “If I can get a 50% grower, it should be priced higher than the market,” says Mazza, managing director at Direxion, which has an $80 million Work from Home ETF with 40 similar stocks. “The thesis for these companies actually remains better than ever.”