Breaking Down Zomato Share Price ₹229,054.4 Crore Market Cap: Is It Sustainable?
Zomato, the popular food delivery platform, has been making headlines with its impressive share price performance. The stock recently hit a new 52-week high, leaving investors and analysts eager to identify the key resistance and support levels that could shape its future trajectory.
According to the latest data, Zomato’s share price stands at ₹259 as of August 26, 2024, with a market capitalization of ₹229,054.4 crore. The company’s price-to-earnings (P/E) ratio is 380.5, while its price-to-book (P/B) ratio is 11.
Main Points
Zomato share price has been on an upward trend, with a 52-week range of ₹90 to ₹281. The stock has gained significant momentum in recent months, breaking out of its previous resistance levels and reaching new highs.
One of the key factors contributing to Zomato’s success is its impressive revenue growth. The company reported operating revenue of ₹13,904.00 crore on a trailing 12-month basis, with an annual revenue growth of 67%. This growth has been driven by the increasing demand for food delivery services, particularly during the COVID-19 pandemic.
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Key Resistance and Support Levels
As Zomato’s share price continues to rise, it’s essential for investors to identify the key resistance and support levels that could impact its future performance. According to analysts, Zomato’s share price may face resistance at around ₹334. This level represents a significant hurdle that the stock will need to overcome to maintain its upward momentum. If the stock breaks above this resistance level, it could potentially reach higher targets.
On the other hand, the key support level for Zomato’s share price is around ₹228. If the stock falls below this level, it could signal a potential reversal in its upward trend. Investors should closely monitor the stock’s performance and be prepared to adjust their strategies accordingly.
Zomato’s Expansion Plans
Zomato has been actively pursuing growth opportunities to maintain its competitive edge in the food delivery market. The company has been expanding its operations to new cities and countries, as well as diversifying its offerings to include grocery delivery and restaurant reservations. One of Zomato’s recent acquisitions is the events and movie ticketing business of Paytm. This move is expected to enhance Zomato’s “going-out” segment and provide additional revenue streams for the company.
Analyst Ratings and Target Prices
Several brokerages have issued positive ratings and target prices for Zomato’s share price. CLSA, UBS, and Goldman Sachs are bullish on the stock, citing its faster growth compared to Swiggy and expanding market share. Zomato’s adjusted revenue growth is at 55.9% year-over-year, with a market share of almost 57%.
Morgan Stanley maintains an overweight rating on Zomato with a target price of ₹235 per share. The company is trading near all-time highs and reported a consolidated net profit of ₹175 crore in Q4 FY24.Global brokerage Bernstein has also issued a Buy call on Zomato stock with a target price of ₹230 per share.
Risks and Challenges
While Zomato’s share price has been on a roll, the company faces several risks and challenges that investors should be aware of. One of the key risks is the increasing competition in the quick commerce segment, which could put pressure on Zomato’s stock. The company also faces the risk of internet outages during peak demand periods, which could lead to customer dissatisfaction and a decline in orders.
Additionally, Zomato’s high valuation multiples could be a concern for some investors, as the company’s earnings growth needs to keep pace with its stock price appreciation.
Note: This article is written for educational purposes, Local Haryana does not provide buying and selling of any kind of stock
