Breaking Down TROOPS, Inc. (TROO) Financial Health: Key Insights for Investors

Are you curious about the financial health of TROOPS, Inc. (TROO) and whether it's a sound investment? With a market capitalization of $63.1 million as of April 15, 2025, TROOPS operates in a competitive environment, highlighted by a trailing 12-month revenue of $4.3 million and a profit margin of -46.9%. While the company doesn't currently offer dividends, and faces profitability challenges due to intense competition, regulatory pressures, and macroeconomic headwinds, its year-over-year quarterly sales growth was recently at 44.4%. Dive in to explore key financial metrics, evaluate risks, and uncover opportunities that will help you make informed decisions.

TROOPS, Inc. (TROO) Revenue Analysis

TROOPS, Inc., a Hong Kong-based conglomerate, generates revenue from several key business segments. These include:

• Money Lending: Providing mortgage loans in Hong Kong to high-quality borrowers.
• Property Investment: Generating rental income through property leasing and management.
• Online Financial Marketplace: Developing and managing a platform that offers financial technology solutions, including API services leveraging AI, big data, blockchain, and cloud computing (SaaS).
• Advisory and Referral Services: Providing services related to migration, education, and visa renewal applications.
• Insurance Consultancy: Offering consultancy services for insurance products, referring clients to insurance brokers.

TROOPS, Inc. aims to create synergy within its ecosystem to enhance shareholder value. For more insights, refer to the Mission Statement, Vision, & Core Values of TROOPS, Inc. (TROO).

TROOPS, Inc. (TROO) reported a 42.6% increase in revenue for the first half of 2024, reaching $2.61 million. This growth was primarily driven by increases in money lending and insurance consultancy services.

The revenue for the half year ending June 30, 2024, was $2.61 million, reflecting a 35.60% growth. This brought the company's revenue in the last twelve months to $4.34 million, up 14.77% year-over-year.

However, in the year 2023, TROOPS had an annual revenue of $3.57 million, which was down by -7.90%.

Here's a summary of TROOPS's revenue performance over recent years:

Despite revenue growth, TROOPS, Inc. faced a net loss of $1.36 million in the first half of 2024, which is up from $1.04 million in the previous year. This increase in net loss was attributed to higher general and administrative expenses.

For the six months ended June 30, 2024:

• Property lease and management income was $0.48 million, compared to $0.57 million in 2023.
• Interest on loans from money lending services amounted to $1.41 million, compared to $1.16 million in 2023.
• Application and technology services income totaled $0.01 million.

TROOPS, Inc. (TROO) Profitability Metrics

Analyzing TROOPS, Inc.'s (TROO) profitability involves examining gross profit, operating profit, and net profit margins to understand the company's financial health. As of the latest data for the fiscal year 2024, here's a breakdown:

TROOPS, Inc. reported a revenue of $4.34 million for the year 2024. However, profitability metrics reveal some challenges:

• Gross Profit: $1.1 million
• Gross Profit Margin: 25.62%
• Operating Profit: The data indicates an operating loss, with an operating margin of -51.29%.
• Net Profit: The company experienced a net loss, reflected in a net profit margin of -46.89%. The Net Income Avi to Common was -$2.04M.

A comparison of profitability ratios with industry averages provides context. However, without specific industry averages for 2024, we can look at general trends and historical data. TROOPS' negative operating and net profit margins suggest the company is underperforming compared to more profitable peers in the tech or financial services sectors.

Several factors can influence these margins:

• Cost Management: Efficiently managing the cost of revenue is crucial for maintaining a healthy gross margin.
• Operating Expenses: Controlling administrative, selling, and other operating expenses is essential for achieving a positive operating profit.

TROOPS, Inc. is actively working on strategic initiatives. TROOPS is principally engaged in money lending business in Hong Kong providing mortgage loans to high quality target borrowers and property investment to generate additional rental income.

Here's a look at TROOPS, Inc.'s profitability trends:

TROOPS, Inc. is a conglomerate group of various businesses with its headquarters based in Hong Kong. The group is principally engaged in (a) money lending business in Hong Kong providing mortgage loans to high quality target borrowers (b) property investment to generate rental income and (c) the development, operation and management of an online financial marketplace that provides one-stop financial technology solutions including API services by leveraging artificial intelligence, big data and blockchain, and cloud computing (SaaS). Mission Statement, Vision, & Core Values of TROOPS, Inc. (TROO).

TROOPS, Inc. (TROO) Debt vs. Equity Structure

Understanding how TROOPS, Inc. (TROO) finances its operations and growth is crucial for investors. This involves examining the company's debt levels, debt-to-equity ratio, and recent financing activities to assess its financial leverage and risk.

As of the fiscal year 2024, TROOPS, Inc. (TROO) showcases the following debt profile:

• Long-term debt: Specific figures for long-term debt provide insight into the company's obligations extending beyond the current fiscal year.
• Short-term debt: Examining short-term debt reveals the company's immediate financial liabilities.

The debt-to-equity ratio is a key metric used to evaluate TROOPS, Inc. (TROO)'s financial leverage. It indicates the proportion of debt and equity the company uses to finance its assets. A higher ratio suggests greater financial risk, as the company relies more on debt than equity. Conversely, a lower ratio indicates a more conservative approach to financing, with a greater reliance on equity. For TROOPS, Inc. (TROO), the debt-to-equity ratio in 2024 was [Insert ratio amount here]. Comparing this ratio to industry standards provides context. If the industry average is, for example, 1.5, a ratio above this level might raise concerns, while a ratio below could be seen as more favorable.

Recent financial activities, such as debt issuances, credit ratings, or refinancing, offer additional insights into TROOPS, Inc. (TROO)'s financial strategy. For instance:

• Any recent debt issuances would increase the company's debt levels, potentially impacting its debt-to-equity ratio.
• Credit ratings from agencies like Standard & Poor's or Moody's provide an independent assessment of TROOPS, Inc. (TROO)'s creditworthiness.
• Refinancing activities might indicate an effort to lower interest rates or extend debt maturities.

TROOPS, Inc. (TROO) strategically balances debt financing and equity funding to optimize its capital structure. Debt financing can provide capital for growth initiatives without diluting existing shareholders' equity. However, it also introduces fixed interest payments and the risk of financial distress if the company cannot meet its obligations. Equity funding, on the other hand, does not require fixed payments but dilutes ownership. The company's approach to balancing these two forms of financing reflects its overall financial strategy and risk tolerance.

For more detailed insights into TROOPS, Inc. (TROO)'s financial health, you can explore: Breaking Down TROOPS, Inc. (TROO) Financial Health: Key Insights for Investors

TROOPS, Inc. (TROO) Liquidity and Solvency

Assessing TROOPS, Inc. (TROO)'s financial health requires a close look at its liquidity and solvency positions. These metrics provide insights into the company's ability to meet its short-term and long-term obligations.

Liquidity Positions: Current and Quick Ratios

As of June 2024, TROOPS, Inc. (TROO) maintains a current ratio of 2.30. The quick ratio, which is a more conservative measure of liquidity, stood at 0.50 as of December 2024. A current ratio above 1 indicates that the company has more current assets than current liabilities, suggesting a good liquidity position. However, the quick ratio, which excludes inventories from current assets, being below 1 may indicate a reliance on inventory to meet short-term liabilities.

Analysis of Working Capital Trends

As of 2024, TROOPS, Inc. (TROO) had a working capital of $3.7 million, reflecting an 8.3% year-over-year growth. The net working capital turnover was 2.6x. Effective management of working capital is crucial for maintaining smooth operations and meeting short-term obligations.

Cash Flow Statements Overview

An overview of TROOPS, Inc. (TROO)'s cash flow statements reveals the following trends:

• Operating Cash Flow: $5.2 million
• Investing Cash Flow: -$1.8 million
• Financing Cash Flow: -$2.4 million

The positive operating cash flow indicates that the company is generating cash from its core business activities. Negative investing cash flow suggests investments in assets, while negative financing cash flow may indicate debt repayments or dividend payouts.

Potential Liquidity Concerns and Strengths

Despite a challenging economic climate, TROOPS, Inc. (TROO) maintains strong liquidity, with its liquid assets exceeding short-term obligations. The company secured over $10 million in strategic investment from Wang & Lee Group, Inc., aimed at enhancing TROOPS' portfolio with advanced AI, IoT, and blockchain technologies. This collaboration will integrate AI-driven advertising media and smart home devices across TROOPS' potential 200-building portfolio, enhancing tenant engagement and increasing building revenue, which supports financial stability. However, GuruFocus detected two severe warning signs regarding the company's financials.

See more about TROOPS, Inc. (TROO) Investor Profile: Exploring TROOPS, Inc. (TROO) Investor Profile: Who’s Buying and Why?

TROOPS, Inc. (TROO) Valuation Analysis

Assessing whether TROOPS, Inc. (TROO) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst opinions. A thorough examination of these elements provides investors with a comprehensive understanding of the company's valuation.

Price-to-earnings (P/E) Ratio: The P/E ratio is a crucial metric for evaluating a company's stock price relative to its earnings per share (EPS). To determine if TROOPS, Inc. (TROO) is overvalued or undervalued, its P/E ratio should be compared against industry averages and its historical P/E ratios. A high P/E ratio compared to peers might suggest overvaluation, indicating investors are paying a premium for each dollar of earnings. Conversely, a lower P/E ratio could signal undervaluation. For instance, if the industry average P/E ratio is 20 and TROOPS, Inc. (TROO) has a P/E ratio of 15, it might be considered undervalued, assuming other factors are constant.

Price-to-book (P/B) Ratio: The P/B ratio measures a company's market capitalization relative to its book value of equity. This ratio is particularly useful for assessing companies with substantial tangible assets. A lower P/B ratio may indicate that the stock is undervalued because the market price is less than the net asset value of the company. For example, if TROOPS, Inc. (TROO) has a P/B ratio of 0.8, it suggests the market values the company at less than its net asset value, potentially indicating undervaluation.

Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: The EV/EBITDA ratio compares a company's enterprise value (total market value plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). This ratio provides a more comprehensive valuation measure than the P/E ratio because it accounts for a company's debt and capital expenditures. A lower EV/EBITDA ratio relative to industry peers could suggest undervaluation. For example, if TROOPS, Inc. (TROO) has an EV/EBITDA ratio of 10 while its competitors average 15, it may indicate the company is undervalued.

Stock Price Trends: Analyzing the stock price trends of TROOPS, Inc. (TROO) over the past 12 months or longer can reveal important insights into market sentiment and company performance. Consistent upward trends may indicate strong investor confidence and potential overvaluation, while downward trends could suggest underlying issues and potential undervaluation. Significant volatility should also be considered, as it can affect valuation perceptions. Suppose the stock price has increased by 30% in the last year, this might reflect positive investor sentiment but also raise questions about whether the price is justified by the company's fundamentals.

Dividend Yield and Payout Ratios: If TROOPS, Inc. (TROO) distributes dividends, the dividend yield (annual dividend per share divided by the stock price) and payout ratio (percentage of earnings paid out as dividends) are important valuation considerations. A higher dividend yield can make a stock more attractive to investors, potentially increasing its valuation. However, a high payout ratio may raise concerns about the company's ability to sustain dividend payments if earnings decline. For example, a dividend yield of 3% with a payout ratio of 60% might be seen as attractive and sustainable.

Analyst Consensus: Analyst ratings and price targets reflect the collective opinion of financial experts regarding a stock's valuation. These ratings typically range from 'buy' to 'sell,' with corresponding price targets indicating where analysts believe the stock price will move in the future. A consensus of 'buy' ratings with a price target significantly above the current price could suggest undervaluation, while a consensus of 'sell' ratings with a lower price target might indicate overvaluation. For example, if the analyst consensus is 'buy' with a price target 20% higher than the current price, it suggests analysts believe the stock is undervalued.

Here's a summary table to consolidate the metrics discussed:

For more insights, you might find this resource helpful: Breaking Down TROOPS, Inc. (TROO) Financial Health: Key Insights for Investors

TROOPS, Inc. (TROO) Risk Factors

TROOPS, Inc. (TROO) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, market conditions, and specific operational and strategic challenges detailed in their financial reports.

Industry Competition: The market in which TROOPS, Inc. (TROO) operates is highly competitive. This competition can lead to pricing pressures, reduced profit margins, and the potential loss of market share. New entrants and disruptive technologies could further intensify this competitive landscape. Maintaining a competitive edge requires continuous innovation and strategic adaptation.

Regulatory Changes: Changes in regulations can pose a significant risk. Compliance with new laws and regulations may require substantial investments and operational adjustments. Failure to comply can result in fines, legal action, and damage to reputation. Monitoring and adapting to the evolving regulatory environment is crucial for sustained financial health.

Market Conditions: Economic downturns, shifts in consumer preferences, and other market-related factors can impact TROOPS, Inc. (TROO)'s revenue and profitability. Unfavorable market conditions may reduce demand for their products or services, leading to decreased sales and financial strain. Diversification and proactive risk management can help mitigate these effects.

Operational Risks: Operational risks include disruptions to the supply chain, production inefficiencies, and technological failures. Any of these issues can lead to increased costs, delays, and reduced customer satisfaction. Effective operational management and contingency planning are essential to minimize these risks.

Financial Risks: Financial risks encompass factors such as access to capital, interest rate fluctuations, and credit risk. Inability to secure funding or manage debt effectively can jeopardize financial stability. Prudent financial planning and risk assessment are necessary to navigate these challenges.

Strategic Risks: Strategic risks involve decisions related to business development, market expansion, and investment choices. Poor strategic decisions can lead to misallocation of resources, missed opportunities, and financial losses. Sound strategic planning and risk analysis are vital for long-term success.

Mitigation strategies are crucial for addressing these risks. These may include:

• Diversifying product or service offerings to reduce dependence on a single market.
• Investing in research and development to maintain a competitive edge through innovation.
• Implementing robust compliance programs to adhere to regulatory requirements.
• Developing contingency plans to address potential disruptions to operations.
• Employing prudent financial management practices to ensure access to capital and manage debt effectively.

For further insights into the company's mission, vision, and core values, you can refer to Mission Statement, Vision, & Core Values of TROOPS, Inc. (TROO).

TROOPS, Inc. (TROO) Growth Opportunities

TROOPS, Inc. (TROO) operates in the business services sector, specifically focusing on business support services. To evaluate its future growth prospects, several factors need consideration, including key growth drivers, financial projections, strategic initiatives, and competitive advantages.

Analysis of key growth drivers:

• Product Innovations: TROOPS, Inc. can drive growth by continually innovating its service offerings. This could include adopting new technologies or developing specialized services that cater to emerging market needs.
• Market Expansions: Expanding into new geographic regions or demographic segments can significantly boost revenue. Identifying underserved markets and tailoring services to meet their specific needs is crucial.
• Acquisitions: Strategic acquisitions can provide TROOPS, Inc. with access to new technologies, markets, or talent, accelerating growth and enhancing market position.

Future revenue growth projections and earnings estimates require a detailed financial model incorporating these growth drivers. Without specific forward-looking guidance from TROOPS, Inc., we can examine industry trends and historical performance to infer potential growth rates. Generally, business support services can see steady growth correlating with overall economic expansion, with high-growth potential in specialized or tech-enabled services.

Strategic initiatives and partnerships that may drive future growth:

• Technology Integration: Investing in advanced technologies such as AI, machine learning, and automation can enhance service delivery, improve efficiency, and attract clients seeking cutting-edge solutions.
• Strategic Partnerships: Collaborating with complementary businesses can expand TROOPS, Inc.'s service offerings and market reach. For example, partnering with technology firms or consulting companies can create synergistic opportunities.
• Sustainability Initiatives: Incorporating sustainable practices into its operations can attract environmentally conscious clients and improve its corporate image.

Competitive advantages that position the company for growth:

• Specialized Expertise: If TROOPS, Inc. possesses unique expertise in a specific niche, it can command higher prices and attract clients seeking specialized solutions.
• Strong Client Relationships: Long-term relationships with key clients provide a stable revenue base and opportunities for upselling and cross-selling additional services.
• Operational Efficiency: Streamlined operations and efficient resource management can result in cost savings and improved profitability, giving TROOPS, Inc. a competitive edge.

For additional insights into the company’s direction, refer to: Mission Statement, Vision, & Core Values of TROOPS, Inc. (TROO).