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On Friday, JPMorgan expressed a positive outlook on MakeMyTrip (NASDAQ:MMYT) stock, raising the company's price target from $100.00 to $120.00 while maintaining an Overweight rating. The firm's stance is based on expectations of a 20% revenue increase over the next three years and continued margin expansion.
The firm supports their Overweight rating by highlighting the potential for increased online penetration in MakeMyTrip's various segments. This is anticipated to sustain growth exceeding 20% in the medium term. Additionally, they foresee benefits from operating leverage and a competitive environment that could further enhance the company's profit margins.
Despite a recent 21% decline in MakeMyTrip's stock over the last ten days, which contrasts with a stable NASDAQ, JPMorgan views this pullback as an opportunity for investors. The firm believes the underlying fundamentals of growth and margin prospects remain intact. They note that the stock had previously experienced a 24% surge in September.
JPMorgan also identifies MakeMyTrip as a strategic investment in secular growth trends, driven by its Air (international share) and Corporate business segments. The firm suggests that MakeMyTrip is transitioning into a high-quality investment reflecting aspirational consumption, which could benefit from broader secular trends including rising disposable incomes, increased travel budgets, and a growing inclination to travel.
In other recent news, MakeMyTrip Limited has reported impressive financial performance in the first quarter of fiscal year 2025. The travel company's gross bookings surpassed $2.4 billion, a 22% increase year-on-year. Revenue saw a significant rise, reaching $254.5 million, marking a 31.5% increase from the previous year. The adjusted operating profit also saw a substantial growth, reaching $39.1 million, a 30% year-on-year increase.
In addition to these financial developments, MakeMyTrip experienced a shift in stock rating. Axis Capital (NYSE:AXS) Limited downgraded the company from 'Buy' to 'Add', while raising its price target to $110 from the previous $90. The analyst at Axis Capital Limited cited "increasing evidence of demand normalization" as a factor that may impact the company's stock trend.
These are just a few of the recent developments at MakeMyTrip. The company attributes its robust results to diversified travel offerings and strategic focus on different segments. The firm's belief in MakeMyTrip's advantageous position to capitalize on industry tailwinds such as rising income, favorable demographics, and growth potential in outbound travel from India continues to shape their outlook.
InvestingPro Insights
To complement JPMorgan's bullish outlook on MakeMyTrip (NASDAQ:MMYT), recent data from InvestingPro provides additional context to the company's financial performance and market position.
MakeMyTrip's revenue growth remains robust, with a 29.87% increase over the last twelve months as of Q1 2023, aligning with JPMorgan's projection of sustained growth. The company's gross profit margin stands at an impressive 53.29%, supporting the firm's expectation of margin expansion.
InvestingPro Tips highlight that MMYT holds more cash than debt on its balance sheet, indicating financial stability as it pursues growth opportunities. Additionally, the company has seen a strong return over the last year, with a remarkable 128.12% price total return, reflecting investor confidence in its business model and growth prospects.
However, it's worth noting that MMYT is trading at high valuation multiples across various metrics, including earnings, EBIT, and revenue. This suggests that investors are pricing in significant future growth, which aligns with JPMorgan's optimistic outlook but also implies higher expectations for the company to meet.
For investors seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for MakeMyTrip, providing a deeper dive into the company's financial health and market position.
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