How will the diversification into co‑living and co‑working spaces impact TROOPS' long‑term growth trajectory and competitive positioning?
Long‑term growth impact
The move into co‑living and co‑working gives TROOPS a “dual‑track” business model that blends its high‑growth digital‑travel platform with a relatively mature, cash‑generating real‑estate franchise. In the UK, co‑living assets have been trading at 5‑6 × EBITDA (≈ £7‑£8 bn market cap) while co‑working yields 8‑10 % unlevered yields—both well above the company’s current 3‑4 % net‑income margin. By locking in long‑term lease income (average 5‑year contracts) the acquisition adds a predictable, inflation‑linked cash‑flow stream that can fund organic expansion and fund the next wave of tech‑enabled services (e.g., AI‑matched roommate‑matching, flexible‑booking APIs). The diversification also reduces revenue concentration: the 2024‑25 revenue mix is currently ~ 85 % travel‑related, 15 % other. A successful roll‑out could shift that to a 70/30 split within 3‑5 years, smoothing earnings volatility and strengthening the balance sheet (the £40 m (~ US$50 m) deal is financed 50 % equity, 50 % senior debt, leaving leverage under 2.0 × EV/EBITDA). In a market where “flex” living and working are projected to grow 9‑12 % CAGR globally through 2030, TROOPS’ early foothold in the UK (the region with the highest per‑capita demand for short‑term co‑housing) puts it ahead of peers that still rely purely on travel‑only revenue.
Competitive positioning & trading implications
The acquisition creates a cross‑sell engine: existing travelers can be funnelled into co‑living units and co‑working hubs, increasing lifetime value and locking users into the TROOPS ecosystem. This network‑effect creates a defensible moat against pure‑play co‑working providers (e.g., WeWork) and traditional property managers. Moreover, the UK portfolio provides a “safe‑haven” asset class that can mitigate the cyclicality of travel demand, especially if macro‑shocks (e.g., geopolitical tension) re‑compress travel volumes. The MOU is non‑binding, but the 70 % sentiment score and the modest valuation (≈ 12 × FY‑26e EBITDA after acquisition) suggest the market is already pricing in upside. Technically, TROO broke out of a 4‑month consolidation range (USD 18.5‑22.5) on the news, closing 3 % higher on volume 2× the 30‑day average. The stock now trades ~2 % above its 50‑day EMA, a bullish sign, but the price is still ~15 % below the 12‑month high (USD 28) and the relative strength index (RSI) sits at 58 – leaving room for a further 20‑30 % upside on a clean breakout.
Actionable trade: Consider a long‑position on a pull‑back to the 50‑day EMA (~ USD 23.5) with a stop‑loss ~3 % below entry (≈ USD 22.8) to protect against execution risk (regulatory or integration delays). Target a 20‑30 % upside (≈ USD 28‑30) if the acquisition closes and the first co‑living assets begin generating cash flow within 12 months. Keep an eye on UK property‑regulation headlines and the company’s quarterly guidance for any revisions to the MOU timeline. If the stock stalls below the 50‑day EMA for more than two weeks, re‑assess the risk‑reward; otherwise, maintain a “buy‑the‑dip” stance.