Unsurprisingly, email still dominates our work conversations, but chat and messaging options like Slack and Microsoft Teams (MSFT) are gaining share at a rapid clip. We spend a mere fraction of our time at work communicating via calendar invites, video chat, and phone calls, according to data cited in a new note on Slack from Credit Suisse.
The data came from averages across the worldwide user base for RescueTime, a productivity app that tracks the time users spend on websites and apps on both Windows and Mac devices. RescueTime’s user base of over 100,000 is evenly split between the U.S. and international markets.
RescueTime analysis finds we spend 18% of our time at work on communication apps like email and Slack and 82% on proper work.
In 2013, messaging apps accounted for about 1% of time spent on communication apps, and email accounted for about 14%. By 2019, Slack and other messaging apps accounted for roughly 5% of time spent on communication apps and email accounted for about 10%. (Other communication messaging apps were related to calendar apps, video chat, and voice apps.)
It makes sense that anyone in today’s workforce — in any industry — relies heavily on email and calls to get work done. Take journalism, for instance, which is rooted in networking, source-building, and lead-following. It’s nearly impossible to separate a journalist’s work from any communication method. Another caveat — RescueTime offers an integration with Slack.
‘E-mail-centric communication is being replaced’
Still, the point remains astute and relevant. Both work collaboration and water cooler conversations are increasingly happening on chat apps. Credit Suisse, which first has a $40 price target and neutral rating on Slack, published the data in a note to clients.
Despite a lot of this disruption in workplace communication, the consensus among Wall Street analysts is that this innovation is already priced into the stock’s current valuation. Last week, Microsoft said it has over 13 million people using Microsoft’s Teams app daily, eclipsing Slack’s 10 million.
As of Tuesday afternoon, Slack stock was down 10.5% since going public via direct listing on June 20. Of the 13 firms that have initiated coverage on the stock, seven have a buy rating and six have hold rating. The average price target is $39.55 per share.
“As an increasingly mobile workforce demands more efficient persistent collaboration, email-centric communication is being replaced by team-centric chat,” writes Credit Suisse analyst Brad Zelnick.
Also on Tuesday, KeyBanc analyst Brent Bracelin has an overweight rating and a $44 price target on the stock dubbed Slack the best challenger to email and expects sales to top $10 billion in a decade.
Analysts at Goldman Sachs, Citi, and Morgan Stanley initiated coverage at a hold (or equivalent). Meanwhile, analysts at William Blair, Barclays, and Canaccord are taking more of a bullish stance — specifically citing Slack’s potential to topple email entirely when announcing their calls on Monday.
Another steep challenge for the business is getting Slack’s non-paying customers to convert to paid accounts. While enterprise deals are lucrative for Slack’s business, individuals who are using it as an alternative to Google’s Hangouts or as a more sophisticated version of AOL Instant Messenger aren’t meaningfully boosting the company’s bottom line.
Melody Hahm is a senior writer at Yahoo Finance, covering entrepreneurship, technology and real estate. Follow her on Twitter @melodyhahm. She hosts Breakouts, a monthly interview series for Yahoo Finance featuring up-close and intimate conversations with today’s most innovative business leaders.