Stay-at-Home Stocks Could Rebound As Delta Variant Gains Steam

Rachel Curry - Author

Jul. 28 2021, Published 11:40 a.m. ET

Over the course of 2020, businesses that catered to the stay-at-home lifestyle across the globe saw revenues soar. For publicly traded companies in the category, shareholders bought in at wild rates. What else would explain the 260 percent gain for Crocs Inc. (NASDAQ:CROX) over the last 12 months?

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However, many of those same stay-at-home stocks—like United Parcel Service Inc. (NYSE:UPS) and Peloton Interactive Inc. (NASDAQ:PTON)—have waned as people return to work and life outside of the home. With the Delta variant beginning to rear its ugly head in the U.S., will stay-at-home stocks rebound?

UPS stock falls following slim earnings

UPS stock is down 1.5 percent during the morning on July 28, but that isn't the stock's biggest loss lately. After the company reported its earnings for the second quarter of 2021 after market hours on July 26, the shares dropped 8.6 percent in one fell swoop.

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Why were investors so disappointed by UPS's earnings report? While the company beat analysts' expectations, shareholders just don't think that the performance was good enough.

During the latest quarter, UPS earned $23.4 billion in consolidated revenue with an EPS of $3.06.

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Ultimately, a resurgence in e-commerce growth could be beneficial not only for UPS, but other stay-at-home delivery stocks like FedEx (NYSE:FDX) and Amazon (NYSE:AMZN).

Other stay-at-home stocks to watch as the Delta variant grows

Peloton stock fell 33.75 percent from the beginning of the year through May. Since then, PTON has gained 46 percent of its value back.

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Chewy (NYSE:CHWY) is another company whose shares fell majorly this year. However, the summer is proving to be better for CHWY stock with 35 percent growth since May.

Zoom Video Communications (NASDAQ:ZM) is another company that could benefit from a COVID-19 resurgence in the form of the Delta variant. Many companies have returned or are planning to return to the office, but the Delta variant could put that on hold. Virtual meetings could continue to be a part of the foreseeable future after all. Since May, ZM stock has gained about 24 percent of value. Considering that the shares are 34 percent off their all-time highs, it could be a decent time to plan an entrance.

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Will stay-at-home stocks rebound along with the Delta variant?

The CDC shared new guidelines on July 27 urging people living in hot spot regions to resume wearing masks indoors—even if they're vaccinated. This is a big step backward for the U.S., a country that has been on a fast and strong journey of economic recovery. Also, it could be difficult to get vaccinated people to mask up again. Many Americans hope to avoid facing the reality of the next phase of the COVID-19 pandemic.

While it isn't good news—especially for the country's hotspots like Louisiana, Arkansas, and Florida where vaccination rates are particularly low—it could mean a resurgence for stocks in the stay-at-home space. With that in mind, investors might want to add stay-at-home stocks to their watchlist if nothing else.


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