CounterPath (CPAH) Stock Rockets On COVID-19 Related Revenue Growth

CounterPath CPAH Stock News

CounterPath, Corp. (NASDAQ: CPAH) is running for the top in the market this morning, and for good reason. The company provided an update on the impact of COVID-19 on its revenues. Ultimately, this impact proved to be overwhelmingly positive. Here’s what’s going on:

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COVID-19 Impact Sends CPAH Stock Through The Roof

In the press release, CounterPath said that the COVID-19 pandemic has resulted in strong demand for its products and services during its fiscal fourth quarter, ending April 30, 2020. Ultimately, the increase in demand surrounds the company’s ability to maintain professional communication between remote co-workers.

CPAH said that the increase in demand was not only from new customers, but the company has seen growth in demand from existing customers as well. With the update, the company provided strong guidance for the fourth quarter.

First and foremost, the company is expecting to generate between $3.6 million and $4 million. Should this be the case, year over year growth would come in at between 26% and 40%.

The company said that total revenue for the year is expected to come in between $11.6 million and $12 million. This would result in growth of 8% to 12% on a year over year basis.

In a statement, David Karp, CEO at CPAH, had the following to offer:

We experienced a solid uptake across our business this quarter while seamlessly implementing our own successful work from home policy using Bria to facilitate customer demand. I am extremely proud of the team’s response in supporting our customers through this difficult period. As a result of the increase in orders and service levels, all of the Company’s operations have been running at near full capacity. It has been a transitional year as our operating costs declined while our revenue grew throughout the year, capped off by what is expected to be an exceptional fourth quarter. While certainly some of the increase in revenue from the COVID-19 pandemic will be temporary, the immediate need we are seeing could turn into a lasting trend in the Telecommunications sector. According to Gartner, 74% of companies plan to permanently shift at least 5% of the work force to work remotely post COVID-19[1]. Aside from the benefit realized from the increase in demand from COVID-19, the Company continues to execute its business plan and is operationally stronger as we finish this fiscal year.

Why Investors Are So Excited

Ultimately, there’s good reason for all of the excitement here. At the moment, markets are crashing, stores and schools are closed, and the economy seems to be in the dumps. However, CounterPath showed us that there are some companies that will see clear benefits.

With the company’s products in remote communication, as the COVID-19 pandemic leads to many working from home, it only makes sense that demand is climbing.

While some states are considering opening their economies relatively soon, it will be quite a while before we are back to normal. As such, remote working is here to stay for the foreseeable future. So, there’s a good chance that demand for CPAH products and services will only continue to climb, making the stock one to pay close attention to.

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