The gig economy has grown by leaps and bounds in recent years. Going forward, there's a good chance that America's gig economy will continue to grow faster than the entire workforce. In fact, it's hard to imagine gig work continuing to overtake traditional work as younger generations embrace the new way of working.
While regulations protecting gig workers are sure to cause some turmoil in the gig economy, I think there are few things that can stop them, despite setbacks like no (or limited) benefits and uncertainty about hours and pay .
As an investor, there are more than a handful of ways to profit from the rapidly growing gig economy. In this article, we outline three gig economy stocks that should benefit from further expansion of the sector.
DoorDash (HYPHEN)
Source: dogedash.com
Food delivery platform DoorDash (NASDAQ:HYPHEN) has increased over the past year and has more than doubled over time as demand for quick meals has increased. Last quarter, DASH stock took a slight hit, falling slightly after releasing some “mixed” results.
At the time of writing, DASH stock is down just 3.3%. Despite it, Morgan Stanley (NYSE:MS) views such declines as great buying opportunities as the food delivery heavyweight looks to capitalize on recent efforts. DoorDash continues to expand its user base and does its best to get them to spend more. The company could have what it takes to exceed Morgan Stanley's price target of $145.00 per share.
It's not just the improving environment that bodes well for the food delivery company; The company appears poised for a significant earnings boost. If it can manage costs without hurting growth, DoorDash stock is a gig economy leader to hold on to.
Lifting (LIFT)
Source: OpturaDesign / Shutterstock.com
Lyft (NASDAQ:LYFT) is a $7.1 billion underdog in the ride-hailing scene. And while LYFT stock has endured a brutal crash, it's showing signs of life lately. It has more than doubled in the past year.
Just last week, Lyft stock received another analyst upgrade after improving results under the leadership of its new CEO David Risher. I think the best is yet to come for a company that still has a lot to gain in the ride-hailing market.
Recently, RBC Capital Markets' Brad Erickson raised the possibility that DoorDash's partnership with Lyft is a move that “could create significant value for both.” [firms].” I think he’s right. A potential Dash-Lyft relationship would level the playing field a bit when it comes to the transportation kingpin Above (NYSE:ABOVE), which has been a dominant force in mobility and food delivery.
For me, a DASH-LYFT partnership just makes sense. Who knows? If it works, it could perhaps lay the groundwork for a takeover.
Etsy (ETSY)
Source: Sergei Elagin / Shutterstock
Finally we have it Etsy (NASDAQ:ETSY), a gig economy piece that is my favorite to watch. Shares of the e-commerce platform specializing in homemade products have plummeted in recent years and are now down more than 75% from their peak. While the company faces significant challenges, I see significant value in it as it looks to turn things around after its recent quarterly profit decline.
As consumers find themselves in a difficult position, your average Etsy site is also in a difficult position. However, consumers will not lack disposable income forever. Additionally, Etsy could certainly benefit significantly by using generative AI technology to help consumers discover gifts they didn't even know they wanted.
In fact, when many people visit Etsy they're not entirely sure what treasures they'll find there. AI can help traders better adapt the platform to the AI era. With a price-to-earnings ratio of just 32, ETSY stock may seem too cheap for a company that stands to gain so much from AI innovation.
At the time of publication, Joey Frenette did not hold, directly or indirectly, any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com's publication policies.
Joey Frenette is an experienced investment writer specializing in technology and consumer stocks. A contributor to Motley Fool Canada, TipRanks, and Barchart, Joey excels at identifying mispriced stocks with long-term growth potential in a fast-moving market.
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