Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Ctrip and MakeMyTrip Fly in Different Directions

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Ctrip (NASDAQ: CTRP  ) and MakeMyTrip (NASDAQ: MMYT  ) parted ways in last week's trading action. Shares of Ctrip soared 16%, and MakeMyTrip's stock descended by 10%. 

The two online travel portals are often lumped together by investors as the leaders of the world's two most populous nations. Ctrip is China's leading player. MakeMyTrip is the top dog in India. However, it's no surprise China's been the faster-growing economy. India's slow migration to cyberspace has made it a poor bet for investors hoping to cash in on the inevitable online revolution. There's a surprising twist to this story, but let's save that for later. Let's board last week's trading activity.

Ctrip soared on better-than-expected results. Revenue soared 31%, and its profit of $0.28 a share performed a flyby to embarrass Wall Street's control tower. Analysts were only holding out for net income of $0.23 a share. The beat isn't a surprise. Ctrip beat Wall Street's earnings estimates by better than 20% every single quarter through 2013.  

Ctrip's strength was fueled by a 37% boost in its hotel bookings, but even its other major contributor -- air ticketing -- was no slouch with its 29% advance.

MakeMyTrip, on the other hand, didn't have fresh financials to put out. Investors merely continued to shuffle out of the stock after uninspiring financial results last month led Oppenheimer to downgrade the stock earlier this month. Revenue growth was solid at nearly 23% on a constant currency basis, but the lack of profitability on a reported basis and a soft outlook held the stock back. Oppenheimer's analyst was concerned that its guidance called for a much steeper sequential decline than it has reported in the past. It went on to announce an acquisition of a company that will help it boost its online hotel bookings, but the market wasn't rallying behind MakeMyTrip.

Online travel just isn't enough of an industry in India for investors to jump on the shares, and the country's perpetually fading currency makes it a gamble on a depreciating asset. After all, 23% revenue growth in rupees sounds great, but MakeMyTrip's dollar-denominated accounting actually resulted in a 10% top-line increase.  

Ctrip's holding up considerably better. It is forecasting revenue to climb 25% to 30% for the current quarter. That suggests decelerating growth, but Ctrip's a bit of a lowballer here. Three months ago, it was only targeting a 20% to 25% uptick in revenue. We now know it was actually a heartier 31% advance.

There was a surprise twist promised earlier, and there's no point in keeping it from you. Despite Ctrip's clearly superior fundamentals and last week's divergence in trading, MakeMyTrip is the stock that's actually trading higher in 2014. Ctrip is still showing a negative return for investors this year.

That's not fair, but it also points to the value in Ctrip's stock at this point. MakeMyTrip may have more upside once India comes around to fully embracing travel in general, and online travel in particular, but Ctrip's the one blowing the pros away on a consistent basis right now.

Find six growth stock ideas closer to home
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his six carefully chosen picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2842172, ~/Articles/ArticleHandler.aspx, 8/29/2015 10:48:34 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Rick Munarriz

Rick has been writing for Motley Fool since 1995 where he's a Consumer and Tech Stocks Specialist. Yes, that's a long time. He's been an analyst for Motley Fool Rule Breakers and a portfolio lead analyst for Motley Fool Supernova since each newsletter service's inception. He earned his BBA and MBA from the University of Miami, and he now lives a block from his alma mater.

Today's Market

updated 13 hours ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 3:59 PM
CTRP $69.50 Down -0.46 -0.66% Internat… CAPS Rating: ***
MMYT $13.43 Up +0.27 +2.05%
MakeMyTrip Limited CAPS Rating: *