Our analysis is based on comparing Regus Plc SA with the following peers – Hogg Robinson Group plc, Begbies Traynor Group plc and Management Consulting Group PLC (HRG-GB, BEG-GB and MMC-GB).
Regus Plc SA’s price of GBP 2.49 is greater than CapitalCube’s implied price of GBP 1.76. At this level, CapitalCube believes that Regus Plc SA is overvalued. Over the last 52 week period, the stock has fluctuated between GBP 2.24 and GBP 3.37.
- Compared to peers, relative underperformance over the last year is in contrast with the more recent outperformance.
- IWG PLC currently trades at a higher Price/Book ratio (3.38) than its peer median (0.93).
- IWG-GB‘s operating performance is relatively good compared to its peers. The market currently does not expect high earnings growth relative to its peers but seems to expect the company to maintain its relatively high rates of return.
- IWG-GB has a successful operating model with relatively high net profit margins and asset turns.
- The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
- IWG-GB‘s return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.
- The company’s median gross margin and relatively high pre-tax margins suggest non-differentiated product portfolio but with tight cost control relative to peers.
- While IWG-GB‘s revenues in recent years have grown faster than the peer median, the market gives the stock a P/E ratio that is around peer median suggesting that the market has some questions about the company’s long-term strategy.
- The company’s level of capital investment seems appropriate to support the company’s growth.
- IWG-GB has the financial and operating capacity to borrow quickly.
Regus Plc SA has a fundamental score of 88 and has a relative valuation of OVERVALUED.
Regus Plc SA appears on the top right hand quadrant of CapitalCube’s Value – Price Matrix. We classify this as ‘Safety’. In other words, Regus Plc SA has a relatively high Fundamental Analysis score of 88, while being potentially overvalued and trading higher than its CapitalCube Implied Price of 1.76. There might be some safety in this stock where it’s fundamental strength perhaps justifies its relatively higher price.
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Drivers of Valuation
The market seems to expect IWG-GB to maintain its relatively high returns.
IWG-GB‘s operating performance is higher than the median of its chosen peers (ROE of 20.10% compared to the peer median ROE of 0.19%) but the market does not seem to expect higher growth relative to peers (P/E of 18.79 compared to peer median of 18.79) but simply to maintain its relatively high rates of return.
The company currently trades at a higher Price/Book ratio of 3.38 compared to its peer median of 0.93.
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IWG-GB has moved to a relatively high ROE from an Outperforming profile at the prior year-end.
A complete list of valuation metrics is available on the company page.
Regus Plc SA engages in the provision of global workplace solutions. Its products and services include offices, virtual offices, meeting facilities, and business lounges. It operates through the following geographical segments: Americas; Europe, Middle East and Africa; Asia Pacific; and the United Kingdom. The company was founded by Mark Dixon in 1989 and is headquartered in Luxembourg.
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