Deutsche Bank has upgraded its stock target for PT GoTo Gojek Tokopedia Tbk (GOTO) following a positive performance in the third quarter of 2024. The company reported an adjusted EBITDA of Rp 137 billion, marking its first positive profit after a pro-forma loss of Rp 559 billion in the same period last year.
The increase in performance is attributed to a reduction in e-commerce business consolidation and a commission of Rp 172 billion, alongside improved results from on-demand services and rapid growth in its financial unit.
Mobility on-demand revenue rose 15% to Rp 3.7 trillion, aided by tiered services that helped avoid subsidy wars. However, management noted supply constraints in the last quarter, which is seen as a positive sign.
The financial unit saw a threefold increase in loans, reaching Rp 4.3 trillion, with management projecting further growth by the end of 2025. The GoPay application, launched last year, has gained strong demand, particularly for cash loans, although it reported an adjusted EBITDA loss of Rp 65 billion.
Despite a net pro-forma loss of Rp 1.64 trillion for the quarter, this figure is significantly lower than the previous year, with half attributed to long-term funding from e-commerce deals. Overall, Deutsche Bank views GoTo as an attractive investment due to its strong positions in mobility and e-commerce, improved financials, and a robust balance sheet.
Following the news, GOTO's stock fell 2.56% to Rp 76 per share on November 25, 2024.