MMYT is now overvalued and could go down -44%

Based on our analysis, MakeMyTrip has received an overvalued rating of 1 out of 5 stars from Cashu. Several financial ratios indicate that the company’s current market price may not be justified when compared to its industry peers. The Price-to-Earnings (PE) ratio for MakeMyTrip stands at 47.76, significantly higher than the sector average of 17.12. This suggests that investors are paying a premium for each dollar of earnings, which may not be sustainable in the long term. A high PE ratio can indicate overvaluation, especially when earnings growth does not support such high expectations. The Price-to-Book (PB) ratio is another area of concern, with MakeMyTrip at 6.82 compared to the sector average of 2.04. This ratio measures a company's market value relative to its book value. A high PB ratio indicates that investors are valuing the company far above its tangible assets, which could imply excessive optimism about future growth. Despite impressive profitability metrics, such as a net profit margin of 27.71 and a return on equity (ROE) of 19.52, these figures do not mitigate the concerns raised by the elevated PE and PB ratios. Additionally, the company's return on assets (ROA) is 13.06, which, while substantial, is overshadowed by the high valuation multiples, raising questions about sustainability and efficiency. In summary, despite strong performance in profitability, MakeMyTrip’s high valuation ratios suggest potential overvaluation in the current market. This is not a comprehensive overview of our valuation, and should not be viewed as financial advice. Always do your own research before considering an investment.