This Stock Will Continue to Flourish After the Virus Fades

Unsurprisingly, the novel coronavirus devastated most industries during the peak of the crisis. However, a rare few have seen their profile rise dramatically during this unprecedented time. One such name is DocuSign (NASDAQ:DOCU).

Already a relevant name prior to the pandemic, the company facilitates “digital” agreements through electronic signatures. But in the new normal of contactless interface, DocuSign stock has veritably surged in the markets.

We’ve all seen certain companies, like Clorox (NYSE:CLX) or Kroger (NYSE:KR) perform well during this crisis because their primary businesses suddenly aligned with dramatic demand.

But what makes DocuSign a cut above the rest is that management has seized on the opportunity that this situation afforded it.

Primarily, they’ve helped hospitals, clinics and other healthcare providers transition away from paper circulation and toward digital integration.

For instance, by using the company’s DocuSign eSignature platform, patients can fill out necessary information forms prior to service. This way, there’s less human-to-human contact which could lead to infections.

According to scientific experts, the novel coronavirus can live on paper for up to three hours in the right conditions. Granted, the risk of infections through paper contact is minimal. However, when you’re dealing with healthcare workers who are on the frontlines of this pandemic, why take the risk?

Thus, the extreme bullishness in DocuSign stock is very much justified.

Additionally, it’s important to realize that electronic signatures were relevant before the pandemic. With the rise of the gig economy, there’s never been a more crucial time to facilitate traditional face-to-face functions via connected technologies.

And don’t worry: DocuSign stock will continue to flourish after the virus fades. Here are three reasons why.

A Second Wave Means Second Wind for DocuSign Stock
With millions of Americans stuck in their homes for months, so many of us are eager to venture out. Once certain states gave the green light, crowds flocked to the beaches and various public events on Memorial Day weekend. This is the pent-up demand that so many bullish analysts were referring to when discussing a quicker-than-anticipated recovery.

However, there’s always a possibility that a second wave of the coronavirus could hit us. That’s not my opinion. Rather, multiple health officials have voiced concerns of another spike in infections, not only here but across the world. Given that so many people who’ve had Covid-19 were asymptomatic, many have voiced concerns about a premature reopening.

I’ll let the infectious disease experts guide us on this situation. However, it’s safe to say that should another wave occur, the bullish case for DocuSign stock would only improve. Having learned vital lessons the first time around, we won’t be quick to repeat mistakes.

And that translates to an increased emphasis on digital options whenever possible. In this case, you shouldn’t just look at DocuSign stock but also consider direct plays such as Teladoc (NYSE:TDOC).

Social Distancing May Be Here to Stay
Even if we never suffer a severe second wave, state governments — especially those which suffered the most — are unlikely to completely relax their mitigation protocols. One of these measures that could have a long life is social distancing.

Again, this isn’t my opinion. According to researchers at the Harvard T.H. Chan School of Public Health, “On-and-off periods of social distancing will likely be needed into 2022 to ensure that hospitals have enough capacity for future COVID-19 patients in need of critical care…”

Furthermore, some experts believe that we may never completely eradicate the coronavirus. Instead, it will be a nuisance that we must live with. In that case, mitigation protocols like social distancing are the only way to keep people safe while maintaining a viable economy.

Several years down the line, it’s very possible that today’s young generation could be permanently scarred from this experience. According to a report from the Washington Post, an “economic crisis in your teens can alter your behavior for life.”

Because this is both a health and economic crisis of unparalleled magnitude in modern times, we could see a greater generational impact than from any other catastrophe.

While this is a cynical argument, such behavioral changes — like an emphasis toward contactless service — would likely lift DocuSign stock.

Migration Megatrend
In another story from the Washington Post, many people fled the big cities and escaped to rural areas during the height of the pandemic. This is what the news agency termed the “Great American Migration.”

But this shift toward the suburbs and rural areas may not be just a tactical maneuver of self-preservation. Instead, with the other big shift toward remote work, many corporate warriors will likely appreciate life away from hectic cities. Thus, this migration could turn out to be a megatrend.

While I believe in the U.S. economic recovery, I can’t deny that we must contend with acute, immediate challenges. On the corporate side, this entails businesses downsizing their physical footprint. After all, why have a traditional workplace when you can conduct business remotely? It’s good for the workers and great for the bottom line.

But if we were to move in that direction, we would still need to facilitate important functions digitally. As I mentioned at the top, this is where DocuSign comes into play. Therefore, I anticipate a long runway for DocuSign stock.

— Matt McCall

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Source: Investor Place