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Grab (GRAB)
NASDAQ:GRAB
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Grab
(NASDAQ:GRAB)
61Neutral
Positive Factors
Financial Performance
Grab generates positive cash flow, with operating cash flow rising to US$253mn in 4Q24, up from -US$26mn last year.
Growth Initiatives
Grab focuses on expanding its financial services, with its loan portfolio surging 64% YoY in FY24, while still effectively controlling costs.
Market Expansion
Grab's street-hail operator licence in SG enables fleet expansion and complements its market leadership in ride-hailing.
Negative Factors
Profitability Impact
Previous bonus payments resulted in lower EBITDA margins for Grab’s mobility and delivery segments compared to other quarters.
Regulatory Challenges
Grab’s shares are trading down following the reported news on Indonesia’s proposed rule for ride-hailing companies including Grab to pay Eid al-Fitr bonuses to their drivers ahead of the holidays.
Grab (GRAB) vs. S&P 500 (SPY)
Market Cap
$17.36B
Dividend YieldN/A
Average Volume (3M)39.42M
Price to Earnings (P/E)―
Beta (1Y)0.99
Revenue Growth18.52%
EPS Growth76.16%
CountryUS
Employees11,267
SectorTechnology
Sector Strength40
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.03
Shares Outstanding3,954,639,400
10 Day Avg. Volume48,813,783
30 Day Avg. Volume39,423,803
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)8013.57
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$5.53Price Target Upside39.29% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering14
Grab Business Overview & Revenue Model
Company DescriptionGrab Holdings Limited provides superapps that allows access to mobility, delivery, financial services, and enterprise offerings through its mobile application in Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. The company is headquartered in Singapore.
How the Company Makes MoneyGrab generates revenue through a multi-faceted business model, with its primary revenue streams stemming from ride-hailing, food delivery, and financial services. In the ride-hailing sector, Grab earns money by taking a commission from each ride booked through its platform. This commission is a percentage of the fare paid by the passenger. In the food delivery sector, GrabFood charges restaurants a commission on orders placed through its platform and also earns from delivery fees paid by customers. Additionally, Grab's financial services, which include digital payments via GrabPay and other financial products, contribute to its revenue through transaction fees and interest from lending services. Significant partnerships with local governments, financial institutions, and strategic investors also play a crucial role in expanding its market reach and capabilities, enhancing its ability to generate income across its service offerings.
Grab Financial Statement Overview
Summary
Grab's financial health shows a positive trajectory with significant revenue growth and improved cash flow generation. The company has enhanced its gross profit margins and maintains a strong balance sheet with substantial cash reserves and low debt. However, it struggles with profitability as net income remains negative.Income Statement
Grab's revenue growth has been robust, with a significant increase from $675M in 2021 to $2.8B in 2024. Gross profit margins have improved dramatically from negative in 2021 to $1.17B in 2024, indicating better cost management and operational efficiency. However, the company still struggles with profitability, as evidenced by a negative net income of $105M in 2024. The EBIT and EBITDA margins remain negative, highlighting ongoing challenges in achieving operational profitability.65
Positive
Balance Sheet
The balance sheet of Grab shows strong liquidity with cash and short-term investments amounting to $5.87B in 2024, providing a cushion against operational losses. The debt-to-equity ratio is low at 0.06, indicating modest leverage. However, the equity ratio of 68.9% suggests a well-capitalized structure, although the historical negative equity in 2020 raises concerns about long-term stability.70
Positive
Cash Flow
Grab's cash flow has shown a positive trend with substantial improvement in free cash flow from negative in previous years to $775M in 2024. The operating cash flow to net income ratio of 8.1 indicates strong cash generation relative to net income. The positive trend in cash flow positions the company well for future growth and debt management.72
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.80B | 2.36B | 1.43B | 675.00M | 469.00M | Gross Profit |
| 1.17B | 860.00M | 77.00M | -395.00M | -494.00M | EBIT |
| -168.00M | -404.00M | -1.31B | -1.55B | -1.30B | EBITDA |
| -7.00M | -215.00M | -1.41B | -1.50B | -923.00M | Net Income Common Stockholders |
| -105.00M | -434.00M | -1.74B | -3.56B | -2.75B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 5.87B | 5.04B | 5.09B | 8.08B | 3.30B | Total Assets |
| 9.29B | 8.79B | 9.17B | 11.18B | 5.44B | Total Debt |
| 364.00M | 793.00M | 1.36B | 2.17B | 251.00M | Net Debt |
| -2.60B | -2.35B | -587.00M | -2.66B | -1.75B | Total Liabilities |
| 2.94B | 2.32B | 2.51B | 3.16B | 11.74B | Stockholders Equity |
| 6.40B | 6.45B | 6.60B | 8.02B | -6.40B |
| Cash Flow | Free Cash Flow | |||
| 775.00M | -6.00M | -893.00M | -1.02B | -683.00M | Operating Cash Flow |
| 852.00M | 86.00M | -819.00M | -938.00M | -643.00M | Investing Cash Flow |
| -231.00M | 1.87B | -1.06B | -2.76B | -318.00M | Financing Cash Flow |
| -771.00M | -770.00M | -1.12B | 6.57B | 1.58B |
Grab Technical Analysis
Negative
3.97
Price Trends
4.59
Negative
4.76
Negative
4.18
Negative
Market Momentum
-0.02
Negative
47.79
Neutral
40.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GRAB, the sentiment is Negative. The current price of 3.97 is below the 20-day moving average (MA) of 4.39, below the 50-day MA of 4.59, and below the 200-day MA of 4.18, indicating a bearish trend. The MACD of -0.02 indicates Negative momentum. The RSI at 47.79 is Neutral, neither overbought nor oversold. The STOCH value of 40.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GRAB.
Grab Risk Analysis
Grab disclosed 69 risk factors in its most recent earnings report. Grab reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Grab Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $6.16B | 14.55 | 62.32% | ― | 22.72% | ― | |
77 Outperform | $10.98B | 25.72 | 8.38% | 1.20% | 31.46% | 38.73% | |
69 Neutral | $17.54B | ― | 6.85% | ― | 14.82% | 14.06% | |
67 Neutral | $19.05B | 7.17 | 12.09% | 3.59% | 10.93% | 43.19% | |
61 Neutral | $17.36B | ― | -1.62% | ― | 18.52% | 76.16% | |
61 Neutral | $4.74B | 213.48 | 3.48% | ― | 31.39% | ― | |
57 Neutral | $20.24B | 9.51 | -13.28% | 2.72% | 5.43% | -24.54% |
* Technology Sector Average
Performance Comparison
GRAB
Grab
3.97
0.64
19.22%
HPE
Hewlett Packard Enterprise
13.74
-3.21
-18.94%
NTNX
Nutanix
62.04
-1.18
-1.87%
LYFT
Lyft
10.93
-7.83
-41.74%
YMM
Full Truck Alliance
10.23
2.58
33.73%
CWAN
Clearwater Analytics Holdings
23.06
6.62
40.27%
Grab Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: -25.66% | Next Earnings Date: May 15, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance with significant growth in on-demand GMV, positive EBITDA, and increased transacting users. However, there were challenges with mobility margins and higher incentives impacting costs. The strong ecosystem growth and financial services expansion highlight a positive trajectory, but the increased consumer incentives and fintech losses present some concerns.Highlights
Record On-Demand GMV Growth
On-demand GMV accelerated to 20% year-on-year, marking the strongest quarter ever for Grab.
Positive Group Adjusted EBITDA
Grab achieved its first full year of positive group adjusted EBITDA of $313 million, at the upper end of upgraded guidance.
Significant Increase in Transacting Users
Achieved a new record of 44 million MTUs, representing a 17% growth year-on-year.
Financial Services Expansion
GXS in Singapore doubled their loans year-on-year, and financial services are expected to be profitable by the second half of next year.
Strong Ecosystem and Cross-Sell Performance
Users transacting in both Food and Mart have average spend 4x higher and frequency uplifts 2.5x higher.
Increased Advertising Revenue
Penetration of GMV for advertising improved to 1.7% from 1.4% last year.
Lowlights
Dip in Mobility Margins
Mobility margins dipped to 8.4%, although they remain stable year-on-year.
Higher EBITDA Losses in FinTech
Despite revenue growth, EBITDA losses were slightly higher quarter-on-quarter due to increased direct costs and balance sheet provisions.
Increased Consumer Incentives
Consumer incentives as a percentage of GMV jumped to high levels, compared to the last year or two, driven by product adoption efforts.
Company Guidance
During Grab's Fourth Quarter and Full Year 2024 Earnings Results Call, the company highlighted its strong financial performance and provided guidance for 2025. The company reported its first full year of positive group adjusted EBITDA at $313 million, at the upper end of its upgraded guidance, and positive full-year adjusted free cash flow of $136 million. Grab achieved a 20% year-on-year growth in on-demand GMV, driven by product initiatives such as Saver Rides and Priority Deliveries. The company plans to maintain this GMV growth momentum in 2025 while targeting a 40% to 50% increase in EBITDA and a 19% to 22% rise in revenue. Despite fluctuating margins due to market conditions and product mix shifts, Grab is committed to achieving long-term steady-state delivery margins of 4%+ and mobility margins of 9%+. In the financial services segment, the loan book grew to $536 million, with revenue reaching $74 million, although EBITDA losses were slightly higher quarter-on-quarter. The company remains confident that its financial services will become profitable by the second half of next year. Additionally, Grab is actively exploring autonomous vehicles and artificial intelligence to enhance its service offerings.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.