(Reuters) – Shares of Slack Technologies (WORK.N) dipped 3% on Thursday ahead of the workplace communication platform’s quarterly report, pausing a three-month rally fueled by millions of people working from home due to the coronavirus.

A top pick among traders betting on shares of companies benefiting from the recent shutdown of the U.S. economy, Slack on Wednesday closed at a record high after more than doubling from lows in March during Wall Street’s broad selloff.

However, the unprofitable company faces massive competition from Microsoft’s (MSFT.O) Teams workplace chat software, and its recent surge has stretched its valuations.

“The biggest risk to Slack in our view is that the good news is ‘already out there’,” warned Canaccord Genuity analyst David Hynes in a recent client note, maintaining his “buy” rating on the stock.

In Slack’s report after the bell, analysts on average expect a 39.5% jump in quarterly revenue to $188 million and a non-GAAP loss of 6 cents per share, according to Refinitiv. Analysts on average expect an overall loss of $98.5 million for the fiscal quarter ending in April.

Slack is trading at the equivalent of 23 times its expected 12-month sales, according to Refinitiv, an unusually high level, even among other fast-growing software companies.

Reporting by Noel Randewich; Editing by Aurora Ellis

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

US stocks open sharply lower, yields drop in virus worries

NEW YORK — Stocks are opening sharply lower on Wall Street and bond yields are sinking to more record lows as investors fear that economic damage from the spreading coronavirus outbreak will be longer than previously thought. Major U.S. indexe…

UN accuses Japan of ‘extrajudicial abuse’ in arrest of former Nissan boss Carlos Ghosn

Ghosn was detained four times in a row, with two arrests based on the same grounds, and spent more than 130 days in a Japanese jail, according to the United Nations Human Rights Council’s Working Group on Arbitrary Detention report…

AstraZeneca launches trial of potential Covid-19 treatment

British pharmaceutical giant AstraZeneca has confirmed plans to launch a global clinical trial testing one of its drugs in treating the extreme immune response triggered by Covid-19 in severely ill patients. The Cambridge-based drugs group said it was rushing through…

Activity in services sector shows record rebound in June

WASHINGTON — Activity in the U.S. services sector rebounded strongly last month, but those gains are now being threatened by the resurgence of coronavirus cases in many parts of the country. The Institute for Supply Management said Monday that its…