Urban Mobility Shift And Multi Modal Usage Will Support Long Term Earnings Potential

Catalysts

About Marti Technologies

Marti Technologies operates a multi service urban mobility app in Türkiye that combines ride hailing and owned electric two wheeler rentals on a single platform.

What are the underlying business or industry changes driving this perspective?

• A shift from a capital intensive two wheeled fleet toward higher margin ride hailing, combined with a 25% decline in cost of revenues and a 49% improvement in gross profit margin, can support further progress in adjusted EBITDA and overall earnings quality.
• Urban mobility in Türkiye is moving from traditional taxis to app based ride hailing. Marti’s position as the only operator offering car and motorcycle hailing at scale with high single digit take rates leaves room for monetization to support revenue and margin expansion.
• Expansion from 4 to 10 cities that together account for about half of Türkiye’s population and nearly two thirds of its GDP, with strong adoption outside Istanbul, creates a larger addressable base that can feed into ride volumes, revenue and operating leverage over time.
• Multi modal usage patterns, where rides per rider are 3x higher and revenue per rider is 2.7x higher for users of multiple services, suggest that cross usage within the super app can support higher revenue per user and improve unit economics.
• Investment in AI driven pricing, matching and CRM, along with an app redesign that lifted conversion by 2% and increased weekly and monthly active users by 16% and 12% respectively, points to further efficiency in matching riders and drivers, which can help utilization, revenue and net margins.

Assumptions

How have these above catalysts been quantified?

• Analysts are assuming Marti Technologies's revenue will grow by 88.0% annually over the next 3 years.
• Analysts are not forecasting that Marti Technologies will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Marti Technologies's profit margin will increase from -290.1% to the average US Transportation industry of 5.2% in 3 years.
• If Marti Technologies's profit margin were to converge on the industry average, you could expect earnings to reach $8.5 million (and earnings per share of $0.1) by about January 2029, up from $-71.3 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $34.5 million in earnings, and the most bearish expecting $-40.3 million.
• In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 76.5x on those 2029 earnings, up from -2.5x today. This future PE is greater than the current PE for the US Transportation industry at 31.5x.
• Analysts expect the number of shares outstanding to grow by 1.83% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 16.66%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• Marti is still reporting adjusted EBITDA losses, with adjusted EBITDA at a loss of $6 million in the first half of 2025. If operating costs tied to a growing ride hailing team and new departments stay high or rise faster than monetization, the path to positive net margins and earnings could be pushed out, which would weigh on earnings quality over time.
• The company is expanding to 6 new metropolitan areas and does not plan to monetize services in those cities in 2025. If rider frequency or retention in these newer markets settles at lower levels than in the initial 4 cities, revenue per rider and overall revenue could fall short of expectations while fixed and variable costs related to expansion pressure net margins.
• Management highlights high single digit ride hailing take rates today and an intention to adjust them over time. If price sensitivity for riders and drivers in Türkiye turns out to be higher than expected, efforts to lift take rates could slow ride growth or increase churn, limiting revenue growth and constraining improvements in gross margin and net margins.
• The gradual decommissioning of the 2 wheeled electric vehicle fleet is intended to reduce capital intensity while still feeding the multi modal app. If the remaining fleet size is misjudged and cross usage weakens, this could reduce the cost free acquisition of riders into higher margin ride hailing, which would affect revenue growth and unit economics and keep earnings weaker than hoped.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The analysts have a consensus price target of $5.0 for Marti Technologies based on their expectations of its future earnings growth, profit margins and other risk factors.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $6.0, and the most bearish reporting a price target of just $3.0.
  
• In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be $163.3 million, earnings will come to $8.5 million, and it would be trading on a PE ratio of 76.5x, assuming you use a discount rate of 16.7%.
  
• Given the current share price of $2.31, the analyst price target of $5.0 is 53.8% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.