Investing.com-- Jefferies downgraded Indian food delivery firm Zomato Ltd (NS:ZOMT) on Monday, stating that the stock was likely to see a year of consolidation after strong gains in 2024 due to heightened competition and slimmer margins.

Jefferies believes aggressive moves by incumbents and entry of new players in the QC space can result in higher discounting which may pose a threat to the company's profits in the medium term.

Shares of Zomato fell by 4.8% following Jefferies' downgrade of the stock from 'buy' to 'hold' and a 18% cut in the target price. Concerns over intensifying competition in the quick commerce segment and the impact on profitability were cited.

Food delivery aggregator Zomato Ltd.'s shares were downgraded by Jefferies to 'hold' as it revised the target lower, citing increasing competition as a threat to profitability.

Anand Rathi believes multiple players can co-exist in the quick commerce space. It initiated coverage on Zomato and Swiggy last week with 'Buy' ratings and 12-month target prices of Rs 385 and Rs 705,

Zomato receives positive outlook from analysts, maintaining "Overweight" rating with target price of 355, despite recent share tumble.

Zomato's shares dropped 5% after Jefferies downgraded the stock to 'Hold' and cut its target price by 18%. The downgrade cites rising competition and discounting pressures affecting profitability, prompting lower earnings projections for FY25-27.

Jefferies downgrades Zomato to 'Hold' on competition fears; discover what's driving this change and how it affects investors.

Zomato's share price dropped after Jefferies, a financial services firm based in New York, downgraded the stock to 'Hold'

Jefferies believes that Zomato's valuations are not "excessively expensive" in the context of the strong execution and opportunity. However, the rising competition in the Quick Commerce space worries them.