Pandemic Winners Struggle in the Post-Pandemic World

Zoom Video Communications, the company that rose to fame during the early days of the pandemic, reported better-than-expected results for its first fiscal quarter ended April 30, 2023. With total revenue of $1.11 billion and enterprise revenue of $630 million in the first quarter, Zoom raised its full-year guidance as well, expecting around 2 percent revenue growth for the year ending January 31, 2024. That’s obviously a far cry from the growth figures it posted during the pandemic, as the end of working-from-home requirements and stiff competition from Microsoft Teams, Cisco’s Webex and Salesforce’s Slack have brought the former pandemic high-flyer down to earth.

Zoom isn’t the only pandemic winner struggling to maintain its momentum in the post-pandemic world. Other companies that soared under the special circumstances created by Covid-19 have also come crashing down over the past year, as normal life gradually returned. Home fitness company Peloton and DIY marketplace Etsy, which profited from a large volume of mask sales on its platform during the pandemic, are two such examples, along with vaccine maker Moderna and DocuSign, a company that allows companies to manage agreements electronically.

As the following chart shows, all of these companies saw their stock price surge during the Covid crisis, but all of them have come down at least 70 percent from their peak pandemic valuation. $1,000 invested in Moderna shares on March 11, 2020, the day the WHO declared the Covid-19 outbreak a pandemic, would have appreciated to more than $20,000 by August 2021 and would still be worth more than $5,000 today. Investors who bought shares of DocuSign, Zoom or Peloton at the onset of the pandemic and held on to them until now are suffering from a severe pandemic hangover, as the shares of these companies are now worth (significantly) less than they were in March 2020.