The IWG (LON: IWG) share price collapsed on Tuesday after the WeWork competitor published weak results. The stock dropped to a low of 157.85, which was the lowest level since April 2020. It has crashed by over 63% from its highest point in 2020.
IWG losses mount
IWG is a leading British company that offers co-working solutions around the world. The firm’s brands include Regus, Signature, No18. and HQ among others. It targets companies and people in all industries. Some of its customers are firms like Microsoft, Accenture, Blackrock, and Disney among others.
IWG has a substantial market share in an industry that has become saturated recently. Firms like WeWork have taken market share while many large landlords are creating their own co-working spaces.
In a report, IWG said that the company’s system-wide revenue rose by 22.3% year-on-year in the first half of the year. This growth was mostly because of its hybrid working space solutions. At the same time, its EBITDA rose to £122.9 million, which was better than last year’s £5.4 million.
However, it continued making losses, with the adjusted loss after tax being £81.3 million. These results mirrored those of WeWork, which made a big loss in the second quarter of this year. In a statement, the company’s CEO said:
“The integration of the former IWG digital assets is going well. Other leading brands, such as Davinci and Coworker, have been added to the digital platform and further consolidation opportunities are anticipated.”
So, is IWG a good stock to buy? The company faces significant headwinds going forward as the cost of running its business globally continues rising. Also, many companies are now slashing their operation costs, which could see it see a slower recovery. Its occupancy rate rose to 74.9%.
IWG share price forecast
The daily chart shows that the IWG stock price has been in a strong bearish trend in the past few months. The sell-off accelerated when it moved below the important support at 211p. It has moved below the 25-day and 50-day moving averages.
At the same time, the Relative Strength Index (RSI) has pointed downwards. Therefore, the stock will likely continue falling now that it has moved below the important support level at 178p. The next key psychological level to watch will be at 150p.
The post IWG share price plummeted after earnings. Buy the dip? appeared first on Invezz.