Disney’s return-to-office mandate is likely to benefit two Strong Buy stocks. It didn’t take long for reappointed Walt Disney (NYSE:DIS) CEO Bog Iger to make a significant impact. According to a CNBC report, Iger told hybrid employees on Monday that they must return to the corporate offices for four days a week beginning March 1. Naturally, not everyone will take kindly to the development, which should cynically bolster gig economy stocks. In particular, opportunistic investors should pay attention to the tickers UPWK and ROVR.
In an email that CNBC obtained, Iger emphasized the importance of a collaborative environment. “As I’ve been meeting with teams throughout the company over the past few months, I’ve been reminded of the tremendous value in being together with the people you work with,” Iger wrote.
“As you’ve heard me say many times, creativity is the heart and soul of who we are and what we do at Disney. And in a creative business like ours, nothing can replace the ability to connect, observe, and create with peers that comes from being physically together, nor the opportunity to grow professionally by learning from leaders and mentors,” the CEO added.
Almost certainly, interest in gig economy stocks will rise. When the COVID-19 crisis initially capsized American society, white-collar workers enjoyed two critical benefits: continued paychecks and the ability to work from home. However, with fading COVID fears along with rising concerns about a global recession, employers don’t need to play ball.
Essentially, they can tell their workers that it’s their way or the highway. While most will probably (but begrudgingly) toe the line, at least a sizable few will branch out on their own, and this framework should boost the below “Strong Buy” gig economy stocks.
Formerly known as Elance-oDesk, Upwork (NASDAQ:UPWK) represents a freelancing platform that connects independent professionals with client entities that require certain roles to be filled on a temporary basis. In some ways, Upwork rings similarly to a dating site but with an emphasis on professional relations rather than personal ones.
To be fair, UPWK represents one of the riskier ideas among gig economy stocks. UPWK’s financials don’t deliver the most confidence-inspiring metrics. For instance, its Altman Z-Score (a solvency metric) pings at 1.68, reflecting a higher-than-normal danger of bankruptcy over the next two years. As well, the company’s long-term revenue trend (on a per-share basis) and profitability metrics sit in negative territory.
However, Wall Street analysts love UPWK, giving it a Strong Buy consensus rating. Likely, a major factor in this assessment centers on the favorable narrative. According to a February 2022 report by the Pew Research Center, most telecommuters declared they operate remotely by choice rather than necessity.
Having that choice taken away from them could lead to an abrupt standoff, such as workers quitting. At scale, this framework would likely boost the viability of gig economy stocks like UPWK.
What is the Price Target for UPWK Stock?
Turning to Wall Street, UPWK stock has a Strong Buy consensus rating based on eight Buys, one Hold, and zero Sell ratings. The average UPWK price target is $19.44, implying 62.1% upside potential.
Rover Group (ROVR)
Headquartered in Seattle, Washington, Rover Group (NASDAQ:ROVR) operates an online marketplace for people to buy and sell pet care services. These include pet sitting, dog boarding, and dog walking. Fundamentally, Rover Group ranks among the gig economy stocks to buy because of America’s love for its pets. As more companies recall their workers, these employees need pet care specialists to watch over their canine friends.
According to the American Pet Products Association, in 2021, the U.S. pet industry rang up total revenue of $123.6 billion, a sizable leap from the $103.6 billion posted in the prior year. From pet food and treats to medicine and veterinary care, pet owners in this country spare no expense for their furry friends. Therefore, Rover should enjoy a large (and expanding) total addressable market.
Admittedly, Rover presently prints financials that could use some improvement. For instance, the company’s net margin of 4.14% is just barely above middling for the industry. However, it does enjoy a solid balance sheet, characterized by a cash-to-debt ratio of 9.3 times, beating over 85% of the competition.
However, just like Upwork above, analysts love ROVR. Much of this sentiment likely focuses on its burgeoning relevance.
What is the Price Target for ROVR Stock?
Turning to Wall Street, ROVR stock has a Strong Buy consensus rating based on three Buys, one Hold, and zero Sell ratings. The average ROVR price target is $6.19, implying 57.1% upside potential.
Gig Economy Stocks Stand Ready to Benefit
Undoubtedly, many worker bees regret that Bog Iger once again took over the helm at Disney. However, his decision to clamp down on work-from-home protocols likely won’t be unique. Thus, opportunistic investors can likely enjoy some profits by acquiring gig economy stocks.