Analyst expectations rise for Zomato amid 260% jump in stock price

Photo credit: Shutterstock

India-based Zomato has exceeded the stock market gains of all top global delivery services over the past year, prompting analysts to revise their forecasts for the food discovery app, Bloomberg reported.

Analysts’ estimates went up as Zomato’s stock soared 260% since April 2023. According to data from Bloomberg Intelligence, price target increases for Zomato outpaced stocks of ride-sharing and delivery firms worldwide. These include projections from companies like Citigroup and HSBC Holdings.

As Zomato’s growing operations helped dispel concerns about losses, analysts have also changed their estimates for the company to profits.

The Bloomberg report noted that optimism is high not only for Zomato’s delivery business but also for its quick commerce arm, Blinkit. Specifically, Goldman Sachs Group projects a profit boost in this area, given Zomato’s recent performance.

Zomato paid US$ 570 million to acquire Blinkit in 2022. However, Zomato’s early investors questioned the profitability of Blinkit’s business model at the time, analyst Manish Adukia told Bloomberg.

Despite recently hitting break-even, Zomato’s shares already reflect over US$300 million in profits. While some have expressed concern, analysts like Abhisek Banerjee from ICICI Securities justified the high valuation, citing the the high revenues and profits that Zomato could generate.

See also: Can Zomato serve $100b on the menu by 2030?