Shares of Indonesian technology company GoTo Gojek Tokopedia are sharply higher, helped by an analyst’s double upgrade, after closing lower for 16 consecutive trading sessions.
GoTo’s shares were 15% higher at 100 rupiah ($0.01) at the midday break Tuesday, paring its 24% rise in early trading.
A gain at the close of trade would be the company’s first since November 18. Its shares have been hurt by factors including weak earnings, a tech-sector correction and the expiration of a lock-up period for investors who took part in the company’s public offering. Since the company debuted in April its shares have lost 74%, and the stock is still 55% lower since its November 18 close.
UBS analysts on Monday upgraded GoTo’s shares two notches to a buy rating from sell, citing attractive valuations after their slide, with its premium compared with peers like Sea Ltd. and Grab Holdings Ltd. now “largely eliminated.”
UBS analysts Navin Killa, Marissa Putri and Joshua Tanja wrote in a note that while concerns over a 2023 slowdown remain, they still expect GoTo to grow its gross merchandise value, and for adjusted Ebitda to turn positive in the first half of 2023 versus a previous forecast for the fourth quarter of 2025.
“We see long-term value,” they wrote. “The expiry of lock-up and steady progress towards profitability in [2023] should help the stock re-rate, in our view.” They lowered their target price to IDR160 from IDR240 citing lower estimates for gross merchandising value in 2023-24.
“Additionally, with cash balance of US$2 billion and quarterly burn rate of [about] US$250 million, we believe the need for fresh capital issue has reduced although management will likely remain opportunistic here,” the analysts add.
Formed as a merger between ride-hailing company Gojek and e-commerce company Tokopedia, GoTo’s IPO raised around $1.1 billion during its listing in April, in one of the largest initial public offerings in Asia this year.