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Why Netflix, Peloton, Teladoc, and Other Stay-at-Home Stocks Plunged Today

What happened

Many companies that have benefited from the stay-at-home trend saw their stock prices decline sharply on Monday following news that Pfizer's and BioNTech's coronavirus vaccine candidate BNT162b could be more than 90% effective at preventing COVID-19.

As of 11:05 a.m. EST, shares of Netflix (NASDAQ: NFLX), Teladoc Health (NYSE: TDOC), and Peloton (NASDAQ: PTON) were down 5.4%, 7.5%, and 14.6%, respectively.

So what

Streaming-leader Netflix has gained subscribers at a rapid clip during the coronavirus pandemic, as social-distancing guidelines drove people to seek out home-based entertainment options. Sales of Peloton's in-home exercise equipment also surged during the COVID-19 crisis, as fears of getting sick kept people out of gyms.

Teladoc, meanwhile, has seen doctors and patients flock to its telemedicine platform, as healthcare providers sought out ways to deliver care to more people during the pandemic.

After enjoying torrid gains earlier in the year, stay-at-home stocks fell sharply on Monday. Image source: Getty Images.

In turn, Netflix, Teladoc, and Peloton saw their shares surge in 2020. Prior to today, their stock prices were up 59%, 146%, and 342%, respectively. However, following the release of Pfizer's and BioNTech's promising vaccine-trial data, many investors apparently decided to take profits in these stay-at-home stars.

Now what

Although their stocks could decline further as investors reset their short-term expectations, Netflix, Teladoc, and Peloton are all benefiting from powerful long-term growth drivers. The trends toward streaming entertainment, virtual healthcare services, and home-based fitness will not end after the COVID-19 crisis subsides. Thus, long-term investors may want to use the current sell-off in stay-at-home stocks to pick up some shares of Netflix, Teladoc, and Peloton at a discount.

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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Netflix, Peloton Interactive, and Teladoc Health. The Motley Fool has a disclosure policy.


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