Saturday, 18 May 2024


Goldman Sachs raises MakeMyTrip target to $88, maintains ‘buy’ rating By

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On Wednesday, Goldman Sachs adjusted its price target for MakeMyTrip (NASDAQ:MMYT), increasing it to $88 from the previous $84, while sustaining a Buy rating on the stock. The firm’s analyst cited the company’s revenue growth, which slightly accelerated to 28% year-over-year in the fourth quarter, outperforming their estimate by 4%. The growth spanned all segments, including air travel, hotels, and bus services.

The analyst noted the growth was driven by robust travel demand, a shift towards online booking, and potential market share gains. These factors are expected to continue supporting the company’s performance going forward. The competitive landscape for MakeMyTrip is described as benign, and due to the company’s scale and the structure of the industry, significant changes in competition are considered unlikely.

Goldman Sachs has increased its revenue and adjusted EBITDA forecasts for MakeMyTrip by up to 2% and 3%, respectively. The firm projects a 22% compound annual growth rate (CAGR) in revenues for the fiscal years 2024-2026, with operating leverage contributing to a 42% EBITDA CAGR over the same period. The analyst believes that the market has not fully recognized the potential for sustained high revenue growth at MakeMyTrip.

The report further suggests that MakeMyTrip’s stock could maintain its high multiples due to the visibility of its growth. Goldman Sachs’ estimates for the company’s FY25 EBITDA are 7% higher than the consensus. Based on revised estimates, MakeMyTrip is trading at 42 times the FY26 price-to-earnings ratio, which is at the lower end of the spectrum for Goldman Sachs’ coverage of the Indian internet sector.

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InvestingPro Insights

MakeMyTrip (NASDAQ:MMYT) has been capturing investor attention with its robust financial performance and strategic position in the travel industry. With a market capitalization of approximately $9.05 billion, the company’s growth trajectory is reflected in its impressive revenue growth of 36.59% over the last twelve months as of Q3 2024. This aligns with Goldman Sachs’ observation of accelerated revenue growth in the fourth quarter.

InvestingPro data highlights a notable gross profit margin of 52.88%, which underscores the company’s efficiency in maintaining profitability despite costs. Additionally, the EBITDA growth of 163.44% during the same period is indicative of operational excellence and potential…

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