Why MakeMyTrip Limited (NASDAQ:MMYT) Could Be Worth Watching
MakeMyTrip Limited (NASDAQ:MMYT), is not the largest company out there, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$34.10 and falling to the lows of US$27.23. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether MakeMyTrip's current trading price of US$27.23 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at MakeMyTrip’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for MakeMyTrip
What Is MakeMyTrip Worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 0.09% below my intrinsic value, which means if you buy MakeMyTrip today, you’d be paying a fair price for it. And if you believe the company’s true value is $27.26, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because MakeMyTrip’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from MakeMyTrip?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. In MakeMyTrip's case, its revenues over the next couple of years are expected to double, indicating an incredibly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? MMYT’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on MMYT, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
It can be quite valuable to consider what analysts expect for MakeMyTrip from their most recent forecasts. Luckily, you can check out what analysts are forecasting by clicking here.
If you are no longer interested in MakeMyTrip, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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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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