MakeMyTrip Stock Rating Shift: What Investors Need to Know - InvestingPro Insights
On Wednesday, MakeMyTrip (NASDAQ:MMYT) saw a change in its stock rating as Axis Capital Limited adjusted its stance on the company. The travel services provider was downgraded from 'Buy' to 'Add', with a price target increase to $110 from the previous $90.
The rating adjustment was due to "increasing evidence of demand normalization", which could interrupt the stock's upward trend. Despite strong growth performance, MakeMyTrip's stock surged over 150% in the past year.
The new price target is based on a valuation multiple of 40 times the expected enterprise value to EBITDA for September 2026, reflecting a more conservative outlook for fiscal years 2026 and 2027. MakeMyTrip remains well-positioned to benefit from rising disposable income, favorable demographics, and growth in outbound travel from India.
Recent financial results for the company show robust performance in the first quarter of fiscal year 2025, with gross bookings surpassing $2.4 billion and revenue reaching $254.5 million. Strategic investments in technology and diversified travel offerings have contributed to this success.
InvestingPro Insights reveal that MakeMyTrip holds more cash than debt and boasts impressive gross profit margins. However, the stock is trading at a high earnings multiple, indicating investors are paying a premium for its potential. With significant revenue growth and a Price / Book multiple of 9.31, the company's valuation reflects high expectations for future growth.
Despite a cautious rating from Axis Capital Limited, InvestingPro data and tips suggest that MakeMyTrip's financial fundamentals remain strong, with a high market valuation anticipating continued growth and profitability.
In summary, MakeMyTrip's stock rating shift highlights the company's growth potential and financial stability, making it an interesting prospect for investors looking for long-term returns in the travel industry.