Top line

Popular stay-at-home stocks like Peloton and Zoom, which rose during the peak of the 2020 pandemic lockdowns, have taken a hit this year as investors increasingly focus on companies that are affected by the reopening of the economy will benefit and consumers will return to personal activity.

Important facts

While some of the hottest companies of the past year saw incredible growth during the pandemic, many are struggling now as earnings show a slowdown in momentum and broader reopening of the economy picks up pace.

Video conferencing service Zoom and home fitness equipment maker Peloton were considered pandemic-era stock market darlings, with stocks rising roughly 400% each in 2020.

However, as the US economy re-opened in 2021, many of the companies at the center of the stay-at-home pandemic trading have seen share prices decline and lag well behind the rest of the market.

Stocks of Peloton and online education company Chegg are both down about 70% this year; the digital real estate marketplace Zillow and the virtual health company Teladoc over 50%, Zoom and the smart TV company Roku around 40%.

While some of these declines can be attributed to investors who are increasingly focused on reopening trades – companies that will continue to benefit from a broader economic recovery – many of these pandemic favorites have also recently reported lackluster gains that show a slowdown in business .

Peloton saw its stock plummet 35% in a single day after earnings were lackluster and sales forecast for 2022 was lowered, while Chegg plunged nearly 50% after revenues suffered a decline as more schools reopened.