This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

5 Online Travel Stocks With Upside

Stocks in this article: PCLN OWW EXPE TZOO MMYT

MakeMyTrip (MMYT - Get Report) is an India-based online travel company providing customers access to major domestic full-service and low-cost airlines, hotels, Indian railways and major Indian bus operators. Of the 7 analysts covering the stock, 57% recommended buying, while the remaining advise holding. On an average, analysts estimate a 42.2% upside from current levels.

Notably, MakeMyTrip's initial public offering is the first Indian IPO in the U.S. since 2006 and the third since 1999. The company has a 48% share in India's $1 billion online travel market, while its international business, which is 50% on the online platform, contributes nearly 25% toward total revenue.

Looking ahead, the company expects to earn revenue minus service cost in the range of $58-$61 million. MakeMyTrip believes that it is well positioned for long-term growth, led by India's burgeoning middle class and the expected launch of the broadband spectrum in India, which will drive e-commerce and benefit online travel companies.

The company is seeking potential acquisition targets in hotel bookings, exhibitions and technology enablers. MakeMyTrip's chief executive said the company would focus on acquisitions that improve access to consumers, increase margins and growth. MMYT is looking to spend almost $2-$3 billion on technology upgrade in the upcoming year, aimed at customizing various consumer demands and attracting business.

The company estimates the size of the Indian travel market, which stood at $15.8 billion in 2009, to record $20 billion by 2011. Macroeconomic fundamentals like India's GDP forecast to grow at 8.5%, rising consumer spending on travel and entertainment, and a growing middle class will support MMYT's future growth.

Higher vendor bargaining power in the upcoming months will improve revenue margins in the hotel and tour packages business.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.
6 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,416.85 +225.48 1.31%
S&P 500 2,021.25 +19.09 0.95%
NASDAQ 4,683.4070 +45.4130 0.98%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs