CITI Research, working on more conservative assumptions, has lowered its price target for GoTo to 95 rupiah (0.8 Singapore cent) from 195 rupiah.
The research house noted in a report on Wednesday (Jul 3) that the new target price is 1.5 times its financial year 2026 price-to-sales estimate for GoTo’s on-demand services segment. It is also 12 times its FY2026 earnings before interest, tax, depreciation and amortisation (Ebitda) projections for GoTo’s e-commerce business.
Citi further noted that the revised target is five times Citi’s FY2026 adjusted revenues estimates for the company’s financial services. This represents a discount to Grab financial service’s FY2025 adjusted revenues estimates of eight times.
The Citi research team noted that the target was revised to account for the new Tokopedia ownership and new accounting treatment implemented in the first fiscal quarter of 2024.
To recap, GoTo struck a US$1.5 billion deal in 2023 to hand control of its e-commerce business Tokopedia to Chinese social media giant TikTok. GoTo sold 75 per cent of its stake in Tokopedia to TikTok.
The Citi research team said it therefore now estimates GoTo to achieve slightly positive adjusted Ebitda in the current financial year and to achieve a bottom line breakeven in 2026.
Meanwhile, the brokerage maintained its “buy” call on the counter. The research team said GoTo’s shares “should trade at a premium” relative to its regional peers, given the company’s “dominance in Indonesia”.
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“We believe the shares offer significant potential upside from current levels if the company succeeds in delivering on its strategy,” it added.
