Online travel services provider MakeMyTrip is Tuesday's selection for IBD 50 Stocks To Watch as the travel stock bounces off a support level, offering a new buy area.
The India-based company provides airline tickets, hotel reservations, rail and bus tickets and other services. MakeMyTrip offers low-cost international flights from India to Dubai, Turkey, Sri Lanka, Canada, Switzerland, France, Spain, Germany, the U.S. and other destinations. It operates under online brands MakeMyTrip, Goibibo and Redbus.
Travel Stock Finds Support
The travel stock was up in premarket trading Tuesday and initially rose to start the trading day, then quickly pulled back modestly. MMYT tested its 21-day exponential moving average but failed to breach the line.
MMYT stock rebounded off its 10-week moving average Monday as the stock found support. The bounce offers an entry point of 44.55 with its buy zone extending up to 49. This is a follow-on entry, because shares are extended from a prior 34.68 buy point.
The travel stock hit a 52-week high on Thursday but reversed lower. Despite that bearish move, MakeMyTrip made a perfect bounce off the 50-day moving average on its daily chart Monday.
Earnings Growth Explodes
The travel platform operator beat fiscal second-quarter earnings and sales estimates on Oct. 31.
Its quarterly gross bookings grew 23.8% over last year's quarter. It reported 68 million monthly active users across all three online brands. The travel stock reported a 25-cent profit in its fiscal second quarter, up from seven cents in the prior year's quarter. Revenue grew to $168.7 million from $131.3 million in the same time period.
MakeMyTrip's fiscal second-quarter earnings grew a whopping 257%, following gains of 163% and 500% in the prior two quarters. Sales growth slowed to 29% from 38% and 68% in the same time period.
Double-Digit Profit Growth Seen
Analysts project 71% full-year profit growth in the fiscal year ending in March and 64% in the next fiscal year.
Its Up/Down Volume Ratio is a robust 1.9, indicating high demand for the stock in the last 50 days. The travel stock holds an IBD Accumulation/Distribution Rating of B+, showing fairly heavy institutional buying over the last 13 weeks.
Mutual fund ownership is increasing, with 295 funds owning the travel stock in December, up from 280 in September and 219 in June. In addition, management owns 10% of MMYT stock.
MMYT holds a best-possible 99 IBD Composite Rating.
Follow Kimberley Koenig for more stock market news on X/Twitter @IBD_KKoenig.
