This Day On The Street
Continue to site
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

5 Online Travel Stocks With Upside

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

Portfolio Manager Jim Cramer and Director of Research Jack Mohr 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

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
SYM TRADE IT LAST %CHG
EXPE $105.89 0.00%
MMYT $19.18 0.00%
OWW $11.53 0.00%
PCLN $1,212.63 0.00%
TZOO $13.11 0.00%

Markets

DOW 18,285.74 +0.34 0.00%
S&P 500 2,130.82 +4.97 0.23%
NASDAQ 5,090.7940 +19.0510 0.38%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs