Although many worker bees initially thought that the work-from-home initiative that the novel coronavirus pandemic caused would be a respite from the cubicles, in reality, the situation was much more nuanced. With children also being forced to learn remotely, the home became much more chaotic than it used to be. With the return to school boom, though, several tech stocks will likely benefit.
First, we’ve learned that nothing can replace human teachers and the in-person learning experience, particularly for younger schoolchildren. For instance, a November 2020 report from NewScientist stated that remote-learning initiatives essentially failed to shine during the pandemic. But in my opinion, that doesn’t necessarily mean education-related tech stocks are irrelevant. Rather, we must implement a balance between educational technology and traditional teaching methods.
Second, the return to the classroom will likely bolster tech stocks which are tied to proven underlying businesses. What I mean is that investors can filter the hype from the substance. Not to pick on Facebook (NASDAQ:FB) but its program to launch virtual reality conference calls crosses the line into absurdity. Look, no one likes meetings after meetings after meetings. Why would anyone want to compound their misery by wearing a stupid VR headset?
Third, with college students also gearing up for the fall semester, education-related tech stocks will likely enjoy a relevance lift. As young adults, college students are better able to handle the rigors and granularity of digital interfaces than schoolchildren. Indeed, medical doctors warn parents of kids under 18 months to never expose them to computerized screens at all.
Kids need to be kids and introducing devices too early or too much will harm their development. But again, through responsible and carefully administered integration, educational technology can play a meaningful role in the broad spectrum of academics.
Of course, the one dark horse in all of this is the coronavirus, specifically its multiple variants. If we have another escalating crisis, that could harm the return to normal. Therefore, keep a watchful eye on broader circumstances as you research these tech stocks to buy.
- Microsoft (NASDAQ:MSFT)
- Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL)
- Stride (NYSE:LRN)
- Bright Horizons Family Solutions (NYSE:BFAM)
- Chegg (NYSE:CHGG)
- Coursera (NYSE:COUR)
- Boxlight (NASDAQ:BOXL)
Back-t0-School Tech Stocks: Microsoft (MSFT)
When it comes to tech stocks for education, I’m going with Microsoft. Yes, it’s an obvious idea and admittedly, I’ve discussed MSFT ad nauseum. But when the topic at hand is the back-to-school season, you really can’t miss with the house that Bill Gates built.
As everyone knows, Microsoft is a reliable name but one that tends to be boring. Well, that’s not the case this year. Shares are up nearly 35% since the January opener as I write this, making it one of the better performing tech stocks of 2021. And recently, it’s been on a tear, with MSFT gaining 5% over the trailing month.
Thanks to its popular Software as a Solution applications, the consumer tech giant dominates the personal and professional work interface market. Personally, I’ve grown up on Microsoft Word and Excel and I continue to rely on them daily in my craft as a professional published writer.
Perhaps that’s the beauty of MSFT — it’s an education play for life.
Alphabet (GOOG, GOOGL)
Another one of the massive giants among tech stocks, Alphabet is really a no-brainer for almost any innovation-related topic. Admittedly, it’s not going to get you rich at these price levels. However, Alphabet and the sheer relevance and dominance of its Google brand has been more than enough to overcome the challenges of the law of large numbers.
Specifically, GOOG stock is up over 60% year-to-date. Since the end of the first half of the year, shares are up over 15%, implying that present catalysts are still very much robust for the company’s multiple businesses.
Relating to the educational realm, Google offers workspace solutions for both educators and students to enhance the learning environment. For students, the tech brand offers multiple resources to advance digital literacy, enabling them to succeed in the job market of tomorrow.
If that wasn’t enough, you can factor in that like Microsoft, Google is a life platform. From the classroom to the boardroom, its digitalization services have proven indelible.
Back-t0-School Tech Stocks: Stride (LRN)
While overexposure to digitalization can be a detriment to the development of young children, under the proper guidance, tech-based platforms can help students compete later in life as adults against an increasingly globalized workforce. Therefore, investors of tech stocks with a longer time horizon may want to consider Stride.
Through the company’s K12 brand, students can enjoy the perfect marriage between innovative curriculum and hands-on learning. For instance, K12 offers assessment programs where individual students can take tailored programs designed to shore up their weaknesses and maximize their potential.
In addition, Stride has a career prep program, which teaches kids valuable real-world skills while fostering an environment where they can find their passion. In other words, the company offers targeted education that expands upon a child’s strengths — something that other countries’ educational systems have exceled at.
Best of all, Stride has delivered strong financial performances, with revenue for the fiscal year ended June 30, 2021 up nearly 48% from the prior year. As society normalizes, LRN is one of the tech stocks to watch closely.
Bright Horizons Family Solutions (BFAM)
Primarily, Bright Horizons Family Solutions operates child-care facilities and is the largest provider of employer-sponsored childcare. However, BFAM is also one of the education-related tech stocks to buy as its educators leverage modern academic innovations such as “interactive white boards, digital cameras, tablets, and laptop computers” for elementary-school-age children.
Predictably, though, Bright Horizons suffered a bad revenue hit in 2020 as working parents no longer needed the company’s services. Top-line sales dropped to $1.5 billion in 2020 from $2.06 billion in 2019. However, the story doesn’t end there as Bright Horizons has posted sequentially and consecutively rising revenue from the second quarter of 2020 onward.
To me, this trend confirms that the adults are returning back to the office. While there was earlier talk about work from home becoming at least a semi-permanent fixture of the corporate environment, the reality is that remote operations are inefficient. As The Guardian pointed out, what could take a quick in-person chat may require emails and conference calls in telecommuting protocol.
Thus, with more people returning to the office, BFAM seems like a no-brainer.
Back-t0-School Tech Stocks: Chegg (CHGG)
As academic institutions increasingly leveraged the power and conveniences of tech, it only made sense that companies like Chegg, which provides digital and physical textbook solutions, profited handsomely. But the Covid-19 crisis took matters to another level, with students forced to adopt remote learning protocols.
The impact is in the numbers. In 2019, Chegg posted revenue of $410.9 million, a gain of nearly 28% from 2018’s tally. But last year, the company rang up sales of $644.3 million, up a staggering 57% year-over-year. If that wasn’t enough, Chegg carried momentum into the current year, with half-year sales totaling nearly $397 million.
On a TTM basis, revenue is $756.6 million, another record for the company if the present trend stays true. But as impressive as the sales tally is, investors should watch out for the bottom line, where the company continues to post annual net losses. Also, CHGG’s technical posture is not the most encouraging, especially compared to other tech stocks.
However, if the company can continue on its trajectory, Chegg has a solid chance of being profitable, which may lift shares.
In my view, Coursera is one of the most intriguing education-related tech stocks because it truly makes digital innovations accretive toward academic goals (as opposed to say promoting VR classroom ecosystems). As you know, attending universities is extremely expensive. Further, for working individuals, fitting their academic pursuits with their professional schedules is a gargantuan challenge.
Enter Coursera, a digital platform that allows students and professionals to develop valuable skills and earn certifications and degrees. But unlike institutions of less reputable character, Coursera is a legitimate academic enterprise, with courses tied to legitimate powerhouses such as the University of Illinois, Duke University and Stanford University. Therefore, prospective students don’t have to worry about wasting their time and money.
As well, Coursera’s professional certification courses are linked to contemporary skill sets that today’s top tech employers seek. Therefore, earning such certifications will give you a leg up against job-seeking rivals.
Better yet, Coursera has been posting strong revenue figures in the first half of this year, indicating growing demand for flexible educational solutions.
Back-t0-School Tech Stocks: Boxlight (BOXL)
In July, I mentioned Boxlight, among the emerging educational tech stocks that specializes in integrative software solutions for academic institutions, as a possible speculative opportunity. Following the company’s second-quarter results, BOXL is providing much more confidence to would-be investors.
At the time, I stated that one of the reasons “why Boxlight is distinct from the competition is that it doesn’t force schools to adapt to a new system. Rather, the Boxlight platform works with already existing content; essentially, it’s a modular add-on. Further, educators can work under one software interface, making utilization seamless.”
That was before its Q2 results. Following the disclosure, we now see that Boxlight posted revenue of $46.8 million, exactly 6X higher than the Q2 2020 result of $7.8 million. On a TTM basis, the company is trending on sales of $121.5 million, a corporate record by a country mile if it holds up.
Additionally, Boxlight posted operating income of $1.6 million in Q2, implying that further momentum should help bring BOXL to the positive end of profitability.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.