- WeWork (WE) stock has been a dud since its debut, but a turnaround could be in store.
- The company’s financials, while imperfect, has some notable bright spots.
- Investors should ease into a WeWork share position if they can envision a growth/improvement story here.
Headquartered in New York, WeWork (NYSE:WE) is sometimes considered a trailblazer in the field of flexible workspaces. Freshly released financial stats suggest substantial upside potential for WE stock this year.
Earnings events can be make-or-break for companies, and WeWork is no exception. Lately, the company’s stakeholders have undoubtedly sought some relief as the share price has tested new lows.
So, has the flexible-workspace movement stalled out? Not at all – and in fact, there’s data to show that WeWork could turn out to be a profitable venture in the near future.
What’s Happening with WE Stock?
Hopes ran high in October 2021, when WeWork debuted on the New York Stock Exchange. It didn’t take long for WE stock to run up to $14.97, but then a sustained downturn commenced.
Interestingly, the WeWork share price made a quick pit stop near $5 recently before getting a nice bounce. What could have caused the investing community to suddenly take an interest in WeWork, then?
No doubt, it was the release of WeWork’s first-quarter 2022 results. WE stock popped 8% in the wake of that release, so clearly there must have been some positive data points.
Usually, a net earnings loss is considered a bad thing. In WeWork’s case, though, it wasn’t a problem. The company’s $504 million quarterly net loss represented a 37% year-over-year improvement, so this was a cause for celebration.
Thriving in Multiple Markets
Furthermore, WeWork’s Q1 2022 revenue of $765 million signified an increase 28% year-over-year. Again, the company’s investors should feel relieved, and even jubilant.
Let’s not miss out on what might be the most important details, though. In some crucial regional flexible-workspace markets, it appears that WeWork is gaining serious traction.
Impressively, “At the market-level, WeWork’s first quarter 2022 gross sales in Manhattan and San Francisco were equivalent to 17% of traditional office market leasing on a square-foot basis.” Of course, these are big-city markets where investors should expect WeWork to thrive.
Not only that, but WeWork’s leasing activity comprised 8% of Miami’s leasing 25% of Boston’s leasing. Plus, the company’s gross sales represented 39% of London’s traditional office leasing – not too shabby at all.
In light of those fantastic facts, WeWork Chairman and CEO Sandeep Mathrani had every right to tout his company’s progress.
“Our first quarter results underscore the long-term value of WeWork’s holistic offerings that are tailored to a new era for the office market,” Mathrani emphasized.
What You Can Do Now
There’s no getting around the fact that WE stock is far from its peak price. However, maybe there’s a prime buying opportunity as WeWork is making moves in high-value regional markets.
So, there’s no need to give up on WeWork now. Anything is possible, and given WeWork’s improving financials, the company could turn a quarterly profit before you know it.
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.