Zomato share price rises 3%. Check target price, 52-week high, buy or sell?
Zomato share price rises 3%. Check target price, 52-week high, buy or sell?
Shares of online food delivery giant Zomato gained nearly 3% in intraday trade on Wednesday, emerging as one of the top gainers on the Bombay Stock Exchange (BSE).
The company’s share price was up 2.84% to Rs 207.75 on the BSE at around 1:20 pm.
Today’s gain comes on the back of developments such as Goldman Sachs buying a stake in Zomato and a report indicating that thecompany has laid off 600 customer support employees.
Zomato also received adowngrade from BofA Securitieslast week, leading to a sharp drop in its share price.
ZOMATO STOCK PRICE TREND
It is worth mentioning that the stock has declined 25% this year and nearly 7% in the past month. It is currently down over 31% from its 52-week high of Rs 304.70.
However, before the slump, Zomato’s stock price experienced a period of rapid growth. The key question now is whether the stock has the potential to deliver more returns or if tough competition in the sector will hurt its performance.
Despite intense competition and an industry slowdown, Zomato remains one of the biggest players in India’s online food delivery and quick commerce space.
BUY, SELL OR HOLD ZOMATO STOCK?
There are several positives in favour of Zomato. The company has shown consistent sales growth over the past eight quarters, and revenue growth has also been strong.
However, in Q3FY25, the company reported a 57% drop in net profit, falling to Rs 59 crore from Rs 138 crore in the same period last year.
Out of 29 analysts tracking the stock, 23 have a ‘Buy’ rating, while two have a ‘Hold’ rating and four have a ‘Sell’ rating.
The average target price is Rs 283, indicating an upside of over 36%.
While Zomato’s financial growth has been strong, some investors may find the stock overvalued due to its price-to-earnings (P/E) ratio. However, Zomato’s P/E remains more attractive than that of rival Swiggy. Additionally, its price-to-book value is also better than its peers.
Although the stock is currently in a technical downtrend, a majority of brokerages remain bullish.
For instance, JM Financial has a ‘Buy’ call on the stock with a target price of Rs 280. ICICI Securities also has a ‘Buy’ rating on Zomato, with a target price of 310.
On the other hand, BofA Securities recently cut Zomato’s target price to Rs 250 and downgraded it to ‘Neutral.’
