Bank of America’s decision to cut its view on MakeMyTrip (MMYT) while keeping a Buy rating, citing expected Q4 travel disruptions, has sharpened investor focus on the stock’s short term risk and support.
See our latest analysis for MakeMyTrip.
The recent cut in outlook comes after a sharp swing in sentiment, with a 30-day share price return of 10.22% and a 90-day share price return of a 48.45% decline, pushing the latest share price to $40.85. This is despite the 3-year total shareholder return sitting at 70.28% and the 5-year total shareholder return at 58.95%, so recent momentum looks weaker than the longer term record.
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With the shares around $40.85 and the average analyst target at $93.80, set against recent double digit short term declines but multi year gains, you have to ask: is this a reset opportunity, or is the market already pricing in future growth?
Most Popular Narrative: 56.4% Undervalued
Against a last close of $40.85, the most followed narrative anchors on a fair value of $93.80, built on strong earnings and revenue forecasts.
Ongoing investment in product innovation, particularly in AI-powered personalization and user experience improvements, positions MakeMyTrip for higher conversion rates, better customer retention, and ultimately supports expanding net margins through improved operating leverage.
Curious what kind of revenue growth, margin expansion, and future P/E multiple are baked into that fair value? The core assumptions behind this narrative are surprisingly bold.
Result: Fair Value of $93.80 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, this narrative can quickly unravel if competition erodes MakeMyTrip’s market share, or if higher advertising and promotion spending keeps margins under pressure.
Find out about the key risks to this MakeMyTrip narrative.
Another View: What The P/E Ratio Is Saying
The analyst narrative points to a fair value of $93.80, but the current P/E of 68.3x tells a different story. It is well above the US Hospitality industry at 21.5x, the peer average at 26.6x, and even the fair ratio of 52.9x. This signals real valuation risk if expectations cool.
To see how strongly the current price leans on these earnings expectations, and what the numbers imply if the market drifts closer to the fair ratio, See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
With sentiment clearly split between valuation risk and long term potential, it makes sense to examine the full picture yourself and move quickly to shape your own view by weighing 1 key reward and 3 important warning signs
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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