MakeMyTrip (NasdaqGS:MMYT) drew fresh attention after reporting fiscal 2027 first quarter results that combined higher reported revenue with lower net income, along with heavier AI investment and an IPO filing for its Indian subsidiary.

At a share price of US$61.78, MakeMyTrip has seen strong near term momentum, with an 8.48% 1 day share price return and 24.83% 90 day share price return, while the 1 year total shareholder return is down 33.38% and the 5 year total shareholder return is up 128.81%.

If the recent AI and travel demand themes have your attention, it could be a good moment to broaden your watchlist with 68 profitable AI stocks that aren't just burning cash

The stock now trades about 19% below the average analyst target despite a sharp recent rebound and softer earnings. Is the market rightly cautious about MakeMyTrip, or is this discount starting to look excessive as you weigh valuation next?

Most Popular Narrative: 13% Undervalued

Compared with the narrative fair value of about $70.73, MakeMyTrip at $61.78 screens at a noticeable discount. The gap rests on fairly specific growth and margin expectations over the next few years.

Ongoing investment in product innovation, particularly in AI powered personalization and user experience improvements, positions MakeMyTrip for higher conversion rates, better customer retention, and ultimately supports expanding net margins through improved operating leverage.

Increasing integration of ancillary services (hotels, home stays, experiences, insurance, and ground transport) creates diversified and higher margin revenue streams, which are showing high double digit growth and driving improvements in overall net margins and adjusted operating profit.

Want to understand what is baked into that fair value for MakeMyTrip? The narrative leans heavily on rapid earnings growth, richer margins, and a future valuation multiple that assumes meaningful execution. Curious which specific revenue mix shifts and profitability targets underpin that $70.73 figure and how sensitive the outcome is to those assumptions?

Result: Fair Value of $70.73 (UNDERVALUED)

However, MakeMyTrip’s reliance on India and ongoing competition from global and local online travel agents could quickly challenge those margin and earnings assumptions if conditions worsen.

Another View: MakeMyTrip Looks Expensive On Sales

The fair value narrative points to MakeMyTrip trading at a discount to $70.73. Yet on simple sales metrics the stock looks stretched. The current P/S of 5.5x sits well above the US Hospitality average of 1.7x, the peer average of 2.9x, and the fair ratio of 3.1x that the market could move towards. For investors, that gap means less room for error if growth or margins fall short. The key question is: how much premium are you really willing to pay for this story?

Next Steps

Seeing mixed signals on MakeMyTrip and unsure which side to lean towards? You may want to take a closer look at the balance of risks and rewards through the 1 key reward and 3 important warning signs

Looking for more investment ideas beyond MakeMyTrip?

If you want broader context around MakeMyTrip, the next smart step is to scan other high quality stocks so you do not miss opportunities sitting in plain sight.

• Spot potential value opportunities early by reviewing companies that screen well on quality and pricing using the 53 high quality undervalued stocks.
• Strengthen your focus on resilience by checking companies that pass strict financial health checks through the solid balance sheet and fundamentals stocks screener (46 results).
• Get ahead of the crowd by tracking under followed stocks with strong fundamentals using the screener containing 18 high quality undiscovered gems.

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.