In a report released today, Brian Nowak from Morgan Stanley maintained a Hold rating on Mondee Holdings (MOND – Research Report), with a price target of $3.00.
Geoff Meacham has given his Hold rating due to a combination of factors surrounding Mondee Holdings. The company, which operates within the B2B travel marketplace, shows potential with an expected revenue compound annual growth rate (CAGR) of 15% from 2023 to 2025, driven by a positive product mix shift toward non-air travel bookings. Despite Mondee’s strategies to diversify its offerings and grow its gross bookings above market averages, its market penetration remains below 1% within a vast $600 billion offline travel spend total addressable market (TAM). Additionally, while the shift in transaction mix is anticipated to enhance take rates, this growth trajectory still falls short of Mondee’s own long-term revenue goals, which hinge on future acquisitions not factored into Nowak’s analysis.
Another key consideration in the Hold rating is the competitive landscape where Mondee Holdings operates. It faces challenges from larger, well-established players, which could impede its growth and market share acquisition. Furthermore, the company’s limited free cash flow (FCF) generation is a concern, suggesting potential obstacles in funding its growth initiatives and acquisitions without affecting its balance sheet. This combination of intense competition and financial constraints contributes to Nowak’s cautious stance on the stock, leading to the initiation of a Hold rating with a base case price range projection.
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Mondee Holdings (MOND) Company Description:
ITHAX Acquisition Corp is a blank check company.
Read More on MOND:
- Mondee management to meet virtually with JMPS Securities
- Mondee files to sell 1.275M shares of common stock for holders
- Mondee acquires Silicon Valley based AI firm Purplegrid, terms undisclosed
- Mondee price target lowered to $5.50 from $10 at Roth MKM
- Mondee reports Q3 adjusted EPS (10c), consensus (11c)
