On Monday, Goldman Sachs analyst Manish Adukia increased the price target on MakeMyTrip (NASDAQ:MMYT) shares to $120 from the previous $112, while retaining a Buy rating on the stock. The company, which currently trades at $106.41, has demonstrated strong financial fundamentals, earning a "GREAT" financial health score according to InvestingPro analysis. The revision reflects a positive outlook for the online travel company, anticipating continued robust earnings growth driven by several key factors.
Adukia detailed that MakeMyTrip should continue to benefit from strong underlying travel demand, both domestically and internationally. The company has already demonstrated impressive operational efficiency with a gross profit margin of 53.95% and strong revenue growth of 28.95% over the last twelve months. A benign competitive environment and operating leverage are also expected to contribute to margin expansion.
The Goldman Sachs consumer team forecasts a strong performance in 2025 for sectors influenced by affluent consumers, including travel, and has observed improvements in mass urban consumption recently. For deeper insights into MakeMyTrip's financial metrics and growth potential, InvestingPro offers comprehensive analysis with 15+ additional ProTips.
The analyst projects approximately 20% annual revenue growth for MakeMyTrip over the medium term, with an even more significant EBITDA compound annual growth rate (CAGR) of over 30% for fiscal years 2025 to 2027. Despite trading at a relatively high P/E ratio of 50.73, the company's strong growth trajectory and solid balance sheet position it well for future expansion. It is anticipated that MakeMyTrip will meet the lower end of its margin guidance in the third quarter of fiscal year 2025 and possibly exceed the upper end by fiscal year 2027.
For the third quarter of fiscal year 2025, a 21% year-over-year revenue increase is expected, a slight deceleration from the 22% growth reported in the second quarter, yet with improving margins. Adukia suggests that investor attention during the quarterly earnings call will likely center on the company’s mid-term margin trajectory, potential risks from consolidation in the domestic air space, the growth outlook for the international segment, and the strategic uses of cash.
The report concluded with a reiteration of the Buy rating and an updated 12-month target price of $120, which signifies a modest increase in Goldman Sachs' estimates for MakeMyTrip's stock performance.
In other recent news, MakeMyTrip has been the subject of significant analyst attention. Macquarie raised its price target for the company to $105, while maintaining a neutral rating. The firm highlighted positive structural tailwinds expected to drive MakeMyTrip's revenue growth at a high-teens compound annual growth rate.
BofA Securities also adjusted its price target upwards to $130, maintaining a buy rating. This came despite a minor downward revision in the forecast for fiscal year 2025 earnings per share, attributed to non-cash translation impacts from the recent depreciation of the Indian Rupee against the U.S. Dollar.
The company reported robust financial performance in recent quarters, with a 22% year-over-year top-line growth. Revenues increased due to a 20% growth in both flights and hotels segment revenues. The second-quarter EBITDA was reported at $32.7 million, and net income was recorded at $18 million. Additionally, the company announced a share buyback program of $150 million.
JPMorgan maintained an overweight rating on MakeMyTrip with a steady price target of $120. The firm based its positive stance on the company's robust growth strategy and market performance. MakeMyTrip aims to grow three times faster than the market rate, supported by its current revenue growth of 28.95% and impressive gross profit margin of 53.95%. The company is broadening its market focus by making inroads into corporate travel and servicing small travel agents.
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