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MakeMyTrip - AI Stock Analysis

Analysis generated July 28, 2024

MakeMyTrip (NASDAQ: MMYT) is a leading online travel company in India, providing a comprehensive range of travel services including air ticketing, hotel bookings, and holiday packages. Founded in 2000, MakeMyTrip has become highly influential in the Indian travel market, leveraging technology to simplify travel planning for millions of customers.

Fundamental Analysis

MakeMyTrip's financial performance in the last quarter shows mixed signals. The revenue for the last quarter was $255M, a notable increase of 25.45% compared to the previous quarter and a 29.37% increase compared to the same quarter last year. This indicates robust top-line growth and strong demand recovery in the post-pandemic era.

However, the net income stood at $21M, a sharp decrease of 87.77% compared to the previous quarter, but an increase of 13.93% year-over-year. The stark quarterly drop raises concerns about profitability and cost management even as the annual perspective shows improvement.

The EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for the last quarter was $0, a decrease of 100% both quarter-over-quarter and year-over-year. This is particularly worrisome as EBITDA is a critical indicator of operational performance and cash flow generation.

The current P/E ratio stands at 52.41, suggesting that the stock is highly valued by the market. This could indicate investor optimism but also exposes the stock to correction risks if growth slows or expectations are not met.

Technical Analysis

Currently, MakeMyTrip trades at $92.24, marking a 9.68% increase over the last month and a staggering 221.17% increase over the past year, indicating a strong bullish trend. The moving averages also support this trend: the current SMA10 is 91.06, up from the previous SMA10 of 90.64.

However, the RSI (Relative Strength Index) is at 89.8, indicating that the stock is potentially overbought. This raises caution signals about the sustainability of the current upward trend and suggests that the stock could be vulnerable to a pullback.

Alternative Data Analysis

MakeMyTrip's alternative data provides a mixed outlook. On the employment front, the number of job postings is up by 6% over the past couple of months, indicating potential growth and expansion, which is a positive sign.

However, the number of visitors to MakeMyTrip's webpage is down by 8% in the same period, a worrying trend that could indicate losing customer interest. Offsetting this, mobile app downloads have surged by 36% to an estimated 30,000 downloads per day, suggesting growing engagement through this channel.

On social media, MakeMyTrip maintains a steady presence with 230,000 followers on Instagram and 130,000 followers on Twitter, with no significant changes in the past few months. AltIndex's AI score for MakeMyTrip stands at 63, indicating a buy signal based on fundamental, technical, and alternative data indicators.

Conclusion and Recommendation

Based on the analysis provided, MakeMyTrip demonstrates strong revenue growth and a robust bullish trend in its stock price. However, there are concerns regarding profitability and operational efficiency, as evidenced by the significant drop in net income and EBITDA.

The high P/E ratio suggests that the stock may be overvalued, and the high RSI indicates it could be overbought, both of which warrant caution. Nevertheless, the increase in mobile app downloads and job postings highlight potential for future growth. The AI score from AltIndex reinforces a positive outlook, suggesting a buy signal.

On balance, MakeMyTrip appears to be a promising but risky investment. Investors with a high-risk tolerance and a long-term horizon might find it a worthwhile addition to their portfolio. However, those concerned with overvaluation and short-term volatility should tread carefully or consider waiting for a more opportune entry point.

Disclaimer: This AI stock analysis, 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.