On Thursday, CLSA updated its outlook on GoTo Gojek Tokopedia (GOTO:IJ) stock, increasing the price target to IDR100.00 from IDR72.00, while retaining an Outperform (2) rating. The adjustment follows GoTo's announcement of robust third-quarter performance, demonstrating significant sequential growth in Gross Transaction Value (GTV), net revenue, and adjusted EBITDA.
The company reported a positive adjusted EBITDA of Rp137 billion, indicating that it is on course to meet its full-year positive adjusted EBITDA guidance. This performance marks a continuation of the positive trend from the previous quarter, attributed to improvements in GoTo's core on-demand services and its lending business.
The upgrade in the price target reflects the firm's enhanced confidence in GoTo's long-term revenue growth, particularly in the lending sector. Following the divestment of Tokopedia, GoTo has shown resilience with two consecutive strong quarters. The analyst noted that the visibility on the company's long-term revenue growth has improved, leading to an increase in the long-term revenue growth rate estimate from 15% to 23%.
The positive adjustment also comes after the resolution of concerns regarding a major shareholder's exit, which has reduced the overhang on the share price. CLSA's revised price target is indicative of the firm's belief in GoTo's continued growth trajectory and its ability to capitalize on its lending services.
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