What Investors Should Consider About MakeMyTrip (MMYT)'s Recent Rally and Valuation

airdrop_whisperer · 2025-12-26T04:18:21+00:00

MakeMyTrip's recent trading shows a slight gain but reveals underlying weakness with a 13.11% drop over the past month. Analysts expect earnings growth, but high valuations and declining estimates suggest caution for investors.

airdrop_whisperer

2025-12-26 04:18:21

Abstract generation in progress

MakeMyTrip (MMYT) wrapped up its latest trading session at $71.39, gaining 1.54% from the prior close—a performance that edged past the broader S&P 500’s 0.54% daily advance. The Dow climbed 0.61% while tech-heavy Nasdaq rose 0.65%. However, this recent bounce masks underlying weakness: shares have tumbled 13.11% over the past month, underperforming both the Computer and Technology sector (-1.42%) and the S&P 500 (-0.8%).

Earnings Outlook and Analyst Projections

Upcoming earnings will be crucial to watch. For the current quarter, analysts project an EPS of $0.43, representing a 10.26% increase year-over-year. Revenue guidance sits at $313.62 million, reflecting 17.3% growth compared to the same quarter last year. On a full-year basis, the consensus targets $1.62 in EPS and $1.11 billion in revenue—improvements of 3.85% and 13.49% respectively from 2023 levels.

Valuation: A Critical Factor to Consider

Here’s where investors need to pause and consider carefully. MMYT trades at a Forward P/E of 43.4, a substantial premium above its industry’s 12.85 average. This 3.4x valuation premium raises questions about growth sustainability and downside risk. The Internet - Delivery Services sector, which houses MMYT, ranks 168th among 250+ industries in the Zacks Industry Rank—placing it in the bottom 32% tier. Historical data shows top-tier industries outperform the bottom half by 2-to-1 margins.

Recent Estimate Revisions and Rankings

Estimate revisions paint a cautious picture: consensus EPS projections have declined 29.13% over the past 30 days—a significant reversal suggesting analyst sentiment is souring. MMYT currently carries a Zacks Rank of #3 (Hold). This ranking reflects that while fundamentals support modest growth, the valuation multiple leaves little room for disappointment. For context, #1 Zacks Rank stocks have averaged +25% annual returns since 1988.

Bottom Line

MakeMyTrip presents a mixed picture worth careful consideration. Revenue growth accelerating to 17.3% is encouraging, but the 43.4 Forward P/E demands strong execution to justify the premium. Combined with negative estimate revisions and sector headwinds, investors should consider waiting for either better valuations or clearer earnings momentum before committing new capital.

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