Street Calls of the Week
Investing.com - Goldman Sachs initiated coverage on Urban Company (URBANCO:IN) with a Neutral rating and a price target of INR140.00 on Thursday.
The investment bank described Urban Company as India’s leading online home and beauty services platform, noting that the company has a defensible business model and strong execution track record.
Goldman Sachs projects a 24% revenue compound annual growth rate (CAGR) for Urban Company over FY25-30E, with a higher 35% EBITDA CAGR for India services excluding InstaHelp, positioning it at the higher end of the bank’s India internet coverage.
Despite the positive growth outlook, Goldman Sachs believes Urban Company’s current valuation already reflects its business strength, trading at 9x FY28E EV/Sales and 64x FY28 EV/EBITDA for India services excluding InstaHelp—a premium to internet peers, though aligned with peers on a growth-adjusted basis with a PEG ratio of 1.4x.
The 12-month price target of INR140, based on a blended 50-50 DCF/PE methodology, implies a 9% downside, though Goldman Sachs noted potential upside if Urban Company successfully adds new growth initiatives or demonstrates better-than-expected operating leverage.
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