Paytm’s Stock Shows Promise as Analysts Forecast Q2 Revenue Growth
Paytm’s Impressive Stock Surge
One97 Communications, the company behind Paytm, has experienced a remarkable 79% surge in its shares this year, and analysts believe there is more growth to come. They have projected a potential 16% increase in the company’s stock value for the next quarter, driven by anticipated sequential revenue growth. This aligns with recent data from InvestingPro, which reveals Paytm’s market capitalization at $75.27 million and an adjusted P/E ratio of 8.14.
Positive Outlook for Paytm
Paytm’s shares had already climbed 5% to INR 954.6 on Tuesday, bolstered by the introduction of an innovative alternate ID-based guest checkout solution and positive Q2 FY24 growth expectations. However, the shares ended the trading session at INR 949.5. InvestingPro data indicates that the company has been trading near its 52-week high and has seen a significant return over the last week.
Optimistic Target Prices
Several brokerages have set optimistic target prices for Paytm. YES Securities has projected a target price of INR 1,025, anticipating a 14% quarter-on-quarter revenue growth from operations and a 7% increase in total expenses. They also expect a 591 basis points improvement in EBITDA margin quarter-on-quarter. This aligns with InvestingPro Tips, which highlight Paytm’s strong return over the past three months and its prominent position in the Financial Services industry.
Motilal Oswal Financial Services Ltd (MOFSL) maintains a ‘buy’ rating with a price target of INR 1,000. They predict a 46% year-on-year increase in gross merchandise value (GMV) to INR 4.7 lakh crore, as well as a 135% year-on-year and 16% quarter-on-quarter rise in loan disbursement to INR 17,200 crore. MOFSL also forecasts operating revenue and EBITDA before ESOP costs for Q2 FY24 at INR 2,600 crore and INR 175 crore respectively. They anticipate strong Q2 subscriptions for Paytm’s payment devices and improvements in operating profitability due to increased contribution margin and operating leverage.
Bernstein has also added Paytm to its India portfolio, setting a price target of INR 1,100. They foresee the company becoming profitable by FY25 through increased payments volume and expect an improvement in EBITDA margin. They also anticipate robust growth in Paytm’s lending business, leading to profitability by FY25 with an EPS of INR 130 by FY30. However, InvestingPro Tips suggest that analysts do not expect the company to be profitable this year and that it has not been profitable over the last twelve months.
Upcoming Q2 Results
Paytm’s Q2 results will be announced on October 20, 2023, providing more insight into the accuracy of these forecasts. The company has witnessed a decrease in net loss and revenue growth from operations. However, InvestingPro data indicates a slow growth rate of 1.59% for the company. For additional insights and real-time metrics about companies like Paytm, you can explore the InvestingPro product.
This article offers an enriched and detailed overview of Paytm’s stock performance and analysts’ forecasts. It explores the projected revenue growth, target prices set by brokerages, and upcoming Q2 results. The information provided is valuable for investors and individuals interested in Paytm’s performance in the financial market.
