Stocks on Wall Street ended on positive ground on Friday, with the and closing at new all-time highs amid continued optimism about the advancement of the COVID-19 vaccine.
Friday's earnings contributed to the market's gains this month. It is on track for its largest monthly profit since January 1987, up 12.9% in November. The S&P 500 and NASDAQ were up 11.3% and 11.9% respectively over the same period.
Investors will keep an eye on new COVID-19 vaccine heads and developments around the pandemic over the next week amid fears that the record increase in the number of cases will lead to further restrictions.
Below we highlight one stock that has proven to be able to successfully navigate current market swings and another stock likely to incur additional losses in the coming days:
Stock to buy: DocuSign
DocuSign (NASDAQ 🙂 – widely regarded as the leader in the electronic signature market – flourished this year as the COVID-19 pandemic and the shift to a work-from-home environment generated massive demand for created his services.
Shares of the San Francisco, California-based software-as-a-service company more than doubled in 2020, up 206%, taking the 12.6% rise of the benchmark S&P 500 in the same time frame far exceeded.
DOCU stock closed at $ 226.87 on Friday, putting the leading provider of electronic signature technology at a valuation of approximately $ 41.6 billion.
DocuSign, whose second quarter results, to be released easily in early September, is expected to report earnings on Thursday, December 3 after the closing bell.
Consensus estimates call for earnings per share (EPS) of $ 0.13, an improvement from earnings per share of $ 0.11 in the same period a year ago. Revenue is expected to increase 45% from the same period a year earlier to $ 361.1 million as fewer business travel during the ongoing pandemic led to more companies signing contracts electronically.
In addition to the top and bottom line numbers, market players will also focus on DocuSign's customer additions update to see if it can maintain its scorching growth rate.
The company added 166,000 new paying customers in the first half of this fiscal year, already exceeding the total number for the previous year (112,000). It now has 749,000 customers in more than 180 countries, 75% more than two years earlier, when it had 429,000.
Investors will also be pleased to receive more information about the company's efforts to expand its product portfolio, such as adding a notary service that does not require a personal signature. It also invests in international expansion.
Despite positive vaccine announcements this month, we expect DocuSign to remain resilient as the renewed wave of infections among US fans is worried that a number of states and cities will have to re-impose social distance restrictions in an effort to stem the rapid spread to slow down the virus.
This would likely result in even more demand for DocuSign & # 39; s remote work tools.
Stock to Dump: Nikola
Investors may want to stay away from Nikola (NASDAQ 🙂 this week, amid growing concern that the all-important $ 2 billion deal of the controversial electric truck maker with General Motors (NYSE 🙂 will not be finalized before the approaching deadline of Thursday December 3.
The proposed deal would give GM an 11% stake in Nikola to develop and manufacture the hydrogen fuel cell electric pickup truck called the Badger, while giving Nikola access to GM's Ultrium. batteries and Hydrotec fuel cells.
The deal was initially scheduled to close on September 30, but was delayed, in part, due to a damning report by a short-selling investment company accusing electric vehicle startups of misleading investors.
Chief Executive Mark Russell, who replaced deposed founder Trevor Milton in September after allegations of fraud, last week failed to give any assurance that the partnership with GM would still go ahead.
Shares of the Phoenix, Arizona-based EV startup are down nearly 70% since hitting a record high of $ 93.99 shortly after it was made public in June through a reverse merger with VectoIQ, an acquisition company for special purpose, or SPAC
The stock, which has fallen about 33% since the report was released on September 10, closed at $ 27.93 on Friday, yielding a market cap of about $ 7.4 billion.
Another possible cause for concern is speculation as to what Milton plans to do with the 92.2 million NKLA common stock he owns after a lock-up period that prevented him from selling his property ends Tuesday December 1
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There are approximately 360.9 million shares of the company outstanding, making the former CEO Nikola & # 39; s largest single shareholder.
If Milton were to sell even a fraction of his NKLA holdings, it could put great technical selling pressure on the stock. Taking this into account, the electric vehicle manufacturer's stocks are likely to remain vulnerable to sharp swings in the coming days.
