- WeWork (WE) stock is trading at a steep discount compared to its initial public offering (IPO) price.
- If you believe that the flexible workspace industry has a future, then there could be a great investment opportunity here.
- Investors should consider picking up a few shares of WeWork at the current price.
WeWork (NYSE:WE) seeks to be a pioneer in the field of flexible workspaces. WE stock is highly affordable now, but has the potential to move much higher in the near future.
It’s not an exaggeration to say that WeWork is an office-space innovator. Just take a look at what a modern office can look like: it can be colorful, creative, roomy and inviting.
In a time of acute labor shortages, workers can afford to demand more enticing workspaces like the ones that WeWork provides. Yet, it’s reasonable for investors to ask whether the company is able to generate strong revenues with this unusual business model.
I’ll answer that question today. Plus, I’ll delve into a notable partnership that could expand WeWork’s business into a high-potential, tech-focused market.
What’s Happening with WE Stock?
The history of WE stock is interesting to say the least. For the full scoop on this, I recommend checking out InvestorPlace contributor Samuel O’Brient’s report on how WeWork eventually arrived on Wall Street.
Just to give you a quick recap, WeWork first planned an initial public offering (IPO) for 2019. That year, the company reported steep financial losses and a U.S. Securities and Exchange Commission (SEC) investigation ensued.
Fast-forward to October 2021, and WeWork finally debuted on the New York Stock Exchange. Very quickly, WE stock ran up to $14.97, but that turned out to be the peak price.
It has been all downhill from there, unfortunately. More recently, WeWork shares have traded at $6 or $7.
So, is WE stock a toxic asset, or a terrific bargain? It depends on one’s perspective, but there are reasons to believe in the future of this space-as-a-service company.
After all, WeWork has demonstrated revenue growth. During 2021’s fourth quarter, WeWork generated $718 million in revenue, indicating a 9% quarter-over-quarter increase. Furthermore, this result represents the company’s second consecutive quarter of sequential revenue growth.
Powering the Future of Work
In order to continue the company’s trajectory of revenue improvement, WeWork must continue to expand and innovate. Fortunately, the company is demonstrating a willingness to push the boundaries of modern workspace technology.
As evidence of this, WeWork disclosed an eye-opening partnership with real-estate software provider Yardi. This collaboration will combine Yardi’s software-tech capabilities with WeWork’s global member network to provide businesses with a platform to power and optimize their flexible-workplace strategies.
The resulting product is set to launch in July of this year. It will enable the clients to “book a desk, private office or conference room in any company-leased or owned office space, any WeWork location, or any affiliate of WeWork.”
Yardi is a great fit for this partnership, as the company is a market leader in developing software solutions for commercial real estate. Impressively, Yardi has over 7,000 employees. Moreover, as Rob Teel, senior vice president, Global Solutions, points out, Yardi’s software is used to manage 12 billion square feet of commercial space.
Scott Morey, president of WeWork Technology and Innovation, emphasized the synergistic benefits of this collaboration, saying, “Together, WeWork and Yardi have the ability to build a scalable end-to-end solution for powering the future of work.”
What You Can Do Now
Sure, WeWork had a rough start as the company attempted an IPO in 2019. Also, WE stock hasn’t been a great performer since its actual debut on Wall Street.
Nevertheless, there may be a prime bargain here for risk-tolerant investors. WeWork is demonstrating revenue growth, and the company’s partnership with Yardi should result in a timely, tech-enhanced product.
Therefore, it’s fine to take a moderate position in WE stock. As the modern workplace evolves, WeWork can grow and the shareholders can hopefully turn a nice profit.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.