JM Financial
Target: ₹850
CMP: ₹681.90
We recently met with WeWork’s management for an update on their business outlook. The company remains on track to add 28,000 seats in FY27, representing a over 25 per cent growth for the year, and management is actively building an expansion pipeline to sustain this growth over the medium term.
Technology is evolving from a mere member experience tool into a key operating lever with increasing potential to enhance monetisation, customer stickiness and scalability, as evidenced by digital products revenue growing 23 per cent in FY26.
Managed Office revenue grew 61 per cent y-o-y (on low base) to ₹480 crore and company is positioning Managed Office to cater to GCC requirements for scalable, high-specification workplaces, potentially increasing exposure to larger enterprise-led demand pools.
Although the WeWork-branded seats are the core of the business, the company has made strong inroads into the managed vertical, which now accounts for over 20 per cent of the topline.
With 12msf AUM and healthy expansion pipeline, we expect WeWork to report a 22/24 per cent CAGR in revenue/EBITDA led by seat addition along with 4 per cent annual growth in ARPM.
Backed by a net cash balance sheet and healthy OCF, the company can comfortably fund the capex for new centres.
We value the stock at 15x FY28E EV/EBITDA and maintain Buy with a TP of ₹850.