Recent share performance and business mix

MakeMyTrip (MMYT) has drawn attention after a period of weaker share performance, with the stock down 11% over the past month and 15% over the past 3 months, inviting closer scrutiny of its fundamentals.

The company generates US$1.04b in revenue across air ticketing, hotels and packages, bus ticketing and other services, with hotels and packages contributing over half of that total.

Those recent setbacks come after a much stronger run in previous years. The share price is now at US$44.09 and short term momentum is clearly fading compared with the longer term total shareholder return over three and five years.

If this cooling momentum has you reassessing opportunities in travel and tech, it can be useful to widen the lens and see how other companies are lining up, including 21 top founder-led companies

With the share price cooling and revenue at roughly US$1.04b, the real question is whether MakeMyTrip is quietly undervalued right now or if the market is already pricing in all the future growth.

Most Popular Narrative: 39% Undervalued

Compared with the last close at $44.09, the most followed narrative pegs MakeMyTrip’s fair value at $71.90, putting a lot of weight on future earnings power.

Expanding online travel adoption, driven by continued growth in internet and smartphone penetration and increasing comfort with digital bookings, especially in underpenetrated tier 2 and tier 3 cities, is likely to further expand MakeMyTrip's addressable market and support sustained top line revenue and booking volume growth.

Rising disposable incomes and a structural shift in consumer preferences towards experiences and frequent travel, including growth in international outbound travel, offer a long runway for increased gross bookings and recurring revenues, as reflected in robust year on year growth in both domestic and international segments.

Want to see what underpins this gap between price and fair value? The narrative leans heavily on rapid earnings compounding, expanding margins, and a richer mix of higher margin travel services. The exact growth path is laid out in detail for you there.

Result: Fair Value of $71.90 (UNDERVALUED)

However, this depends on competition not forcing lower take rates and on travel demand avoiding major geopolitical or regulatory shocks that could affect bookings and margins.

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Another angle: what earnings multiples say

The community narrative leans on future earnings power, yet on current numbers MakeMyTrip trades on a P/E of 80.7x. That is about 4x the US Hospitality industry at 20x and well above the peer average of 28.5x, as well as the fair ratio estimate of 54.5x the market could move towards.

That kind of gap can sometimes close through stronger earnings or through a lower share price. Which path do you think is more realistic for your own assumptions on this stock, the sector, and your time horizon, especially if growth or margins land differently to consensus.

Next Steps

If this mix of optimism and caution feels familiar, do not wait around for a consensus to form. Instead, stress test the 2 key rewards and 3 important warning signs

Looking for more investment ideas?

If MakeMyTrip has sharpened your thinking, do not stop here. Broaden your toolkit with focused stock ideas built from clear financial signals and fundamentals.

• Target stronger balance sheets by scanning companies in the solid balance sheet and fundamentals stocks screener (46 results) that pair financial resilience with room for growth.
• Spot potential mispricings early by reviewing the 49 high quality undervalued stocks that screens for quality stocks trading below their assessed worth.
• Hunt for future standouts before they are crowded trades by checking the screener containing 22 high quality undiscovered gems built around underfollowed companies with solid fundamentals.

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.