Zomato shares have experienced significant volatility in recent times. After reaching a 52-week high in late September, the stock has been on a downward trajectory, impacted by broader market sentiment and internal leadership changes. However, despite recent dips, Zomato's long-term performance remains strong, having delivered remarkable returns over the last year.
Let's dive deeper into the stock's journey and its potential future outlook for investors looking to invest in stocks.
Zomato's stock performance: A rollercoaster ride
Over the past few weeks, Zomato's stock price has seen a mix of highs and lows. On Monday, Zomato shares declined by over 2%, marking the fifth consecutive session of losses. The stock fell by as much as 2.19% to ₹272.15 per share on the Bombay Stock Exchange (BSE), reflecting a cumulative drop of more than 8% in the past five trading days. This fall followed the stock hitting a 52-week high of ₹298.20 apiece on September 24.
However, looking at a broader time frame, Zomato shares have gained over 9% in just one month and more than 37% in the last three months. Year-to-date (YTD), the stock has delivered multibagger returns of over 122%, and over the past year, it has surged by a staggering 170%. Such strong returns make Zomato an attractive option for those looking to invest in stocks with long-term growth potential.
Leadership changes: Impact on stock sentiment
Adding to the recent volatility is the news of Akriti Chopra, Zomato's co-founder and Chief People Officer (CPO), stepping down. On September 27, Zomato announced in a stock exchange filing that Chopra, who has been with the company for 13 years, had resigned to pursue other interests. Her departure comes after significant contributions to the company, including her previous role as Chief Financial Officer (CFO), where she helped scale Zomato's legal and finance teams.
While leadership changes can sometimes cause uncertainty, Zomato's core business remains strong, and many analysts believe the stock will continue to perform well despite short-term fluctuations. For investors looking to invest in stocks, such transitions might open opportunities for long-term gains once market conditions stabilise.
Zomato's stock outlook: What analysts are saying
According to Milan Vaishnav, founder of ChartWizard FZE and Gemstone Equity Research, Zomato shares are still in an overall uptrend, and the recent downward pressure hasn't changed the stock's positive trajectory. Vaishnav explains that as long as Zomato's stock price remains above the ₹255-258 level, the uptrend will stay intact. His analysis suggests that Zomato shares have an immediate upside target of ₹290-₹295, though these levels may act as resistance.
For those looking to invest in stocks, this insight can be useful. However, Vaishnav advises against entering fresh positions in Zomato shares until the ₹295 level is convincingly breached. Existing investors, on the other hand, are recommended to raise their stop-loss to ₹255, protecting their gains while allowing room for potential further appreciation.
Conclusion
Despite recent volatility, Zomato's stock has shown resilience, and its long-term returns remain impressive. The company's dominance in the online food delivery space, combined with its significant stock performance over the past year, makes it a stock worth considering for those looking to invest in stocks. However, with the recent leadership changes and short-term volatility, investors should proceed with caution, keeping a close eye on key price levels and market developments before making any fresh investments.
For those already invested, the current market environment presents an opportunity to adjust positions while riding the broader uptrend that Zomato shares have been following. With analysts targeting higher levels in the near term, Zomato remains an exciting stock to watch in the coming months.
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