AI Stock Analysis: Is MMYT a Buy?

May 21, 6:12 am

MakeMyTrip Limited is a leading travel company in India, providing extensive travel services including flight bookings, hotel reservations, holiday packages, and bus and rail tickets. The company has transitioned into a comprehensive platform, offering both domestic and international travel services. MakeMyTrip's core market lies in the rapidly expanding travel sector in India and other Asian countries.

Fundamental Analysis

MakeMyTrip's revenue for the last quarter was $203 million. Despite a 5.29% decrease compared to the quarter before, there is a substantial 36.60% year-over-year growth, indicating strong market recovery and increasing demand for travel services. However, the quarter-over-quarter decline is a point of concern for short-term investors, highlighting potential seasonal or external market challenges.

The net income for the last quarter shot up to $172 million, reflecting a massive 608.97% increase from the previous quarter and an astronomical year-over-year growth of 2,936.90%. This significant improvement showcases efficient cost management and improved margins, beneficial for long-term sustainability.

EBITDA for the last quarter stood at $24 million, indicating a 36.64% decrease from the previous quarter, but a 30.15% increase compared to the same period last year. This mixed signal may reflect short-term inefficiencies but long-term growth potential.

The current P/E ratio is 188.04, which could signal overvaluation and potentially a bearish outlook. A high P/E ratio implies investors are expecting high growth rates in the future, which also brings heightened risk if the company fails to meet these expectations.

Technical Analysis

Today's stock price is $89.71, showing a significant 47.31% increase compared to a month ago, indicating strong momentum. Over the past year, the stock price has surged 237.89%, reinforcing a long-term bullish trend. The current bullish trend is evident from the increasing Simple Moving Average (SMA10), which is now at 83.67 compared to the previous 82.19.

The Relative Strength Index (RSI) is currently at 66.5, indicating a neutral condition. However, an RSI approaching 70 might signal overbought conditions, suggesting a potential price correction in the near term.

Alternative Data Analysis

MakeMyTrip currently has 22 open positions, down by 8% in the last couple of months, suggesting potential cost-cutting measures or attempts to improve margins. This could raise concerns about the company's growth capabilities and employee morale.

Website traffic has seen an 8% decrease to 47 million visitors, a negative sign that might indicate a loss of customer interest. However, mobile app downloads have increased by 9% to 21,000 daily, indicating a shift in user preference towards mobile platforms, which might signify tech adoption and convenience are driving future customer engagement.

On social media, MakeMyTrip has 230,000 Instagram followers and 130,000 Twitter followers, with no significant changes recently. While this indicates stable customer engagement, stagnant growth in follower count is a neutral factor. AltIndex’s AI score, which combines various data points, gives MakeMyTrip a score of 64, signaling a buy recommendation.

Conclusion & Recommendation

MakeMyTrip presents a mixed but overall positive outlook. The significant year-over-year growth in revenue, net income, and EBITDA demonstrates the company’s strong recovery and potential for long-term growth. However, short-term concerns such as the recent revenue and EBITDA declines suggest caution.

Technically, the stock exhibits a strong bullish trend with substantial price increases over the past month and year. The slight uptick in the SMA10 and the neutral RSI further support a positive short-term outlook.

The alternative data suggests some areas of concern, such as the decrease in job postings and website visitors, but the increase in mobile app downloads points to a potential positive shift in customer behavior.

Given these diverse factors, a balanced approach is recommended. For long-term investors, the stock is promising due to its significant growth potential and strong market position. However, short-term investors should be aware of potential volatility and carefully monitor upcoming quarterly reports. Based on the available data, MakeMyTrip's strategic shifts and strong fundamentals make it a "Hold" before making substantial investments. The AltIndex’s AI score of 64 supports a cautious buy, suggesting investors closely follow up on market and company-specific news.

Disclaimer: This article, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current. Visit MMYT AI Stock Analysis for a more up-to-date analysis.

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