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Grab Holdings Gains 24% in 3 Months: Is it Time to Buy the Stock?
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Grab Holdings Limited’s (GRAB - Free Report) stock has gained 23.7% in the past three months, outperforming the 18.5% rally of the industry and the marginal rise of the Zacks S&P 500 composite.
Three Months Price Performance
Image Source: Zacks Investment Research
GRAB’s performance is higher than that of its industry peers, Bitfarms Ltd. (BITF - Free Report) and Coursera, Inc. (COUR - Free Report) . BITF has declined 15.7%, while COUR has gained 9.9% in the past three months.
As of the last trading session, the Grab Holdings stock closed at $4.5, declining 26.7% from the 52-week high of $5.7.
Considering the rise in GRAB prices in the past three months, investors might be attracted to buy the stock. However, the question of whether to buy the stock or not needs to be answered. Let us analyze it further.
Rising Opportunities for GRAB in Southeast Asia
Grab Holdings is completely dominant in Southeast Asia. Acquiring Uber’s Southeast Asia operations provided a competitive advantage that was lacking from its competitors. In the third-quarter 2024 earnings call, management remarked that the company is approximately 4 times larger than its closest competitors in the mobility market. GRAB enjoys a dominant position in the delivery market despite tackling more competition.
The company’s growth in the Southeast Asia region has not saturated yet. Rather the surge in population and improving middle-class economic health are acting as strong tailwinds for Grab Holdings. Management anticipates that two-thirds of the Southeast Asia population lacks access to banking and financial services partially or completely. This gives a clear-cut idea of the opportunities ahead to GRAB in the financial services division.
We believe that Grab Holdings’ current dominant position can only get better in the future. The quality of data that the company has in terms of customer spending habits, ride-hailing history, location of customers, and many more allows it to come up with and deploy strategies that could cater to the rising demand.
We have found that many customers gravitate toward GRAB due to the quality of its mobility and delivery segments. This indicates that the company’s financial services business in Southeast Asia has immense potential to grow further and capture a huge market share, challenging traditional banking giants.
Grab Holdings’ Effective “One-Stop-Shop” Strategy
GRAB has created a “one-stop-shop” platform that encompasses a variety of services, including food delivery, ride-hailing, grocery shopping and financial services. This provides effective GrabFood to GrabMart cross-selling opportunities. GrabMart grew 1.7 times faster than GrabFood in the third quarter of 2024.
If a customer is both GrabMart and GrabFood user then the customer’s frequency is 5 times higher than those who only use GrabFood. This results in higher customer retention. If the customer is a subscriber, then the retention is 2 times higher. Management anticipates cross-selling to continue to be a strong source of growth.
Existing users of GRAB’s food and mart services become potential customers for the financial services provided by the company. This lowers customer acquisition costs better than traditional marketing efforts.
GRAB Stock Looks Cheap
The Grab Holding stock looks inexpensive and appealing to investors. It is priced at 5.5 times forward 12-month sales per share, which is lower than the industry’s average of 7 times.
Image Source: Zacks Investment Research
Grab Holding’s Liquidity Beats Industry
The company has a strong liquidity position, with a current ratio of 2.7 at the end of the third quarter of 2024, higher than the industry’s 2.16. A current ratio above 1 suggests that the company can easily pay off its short-term obligations.
Image Source: Zacks Investment Research
GRAB’s Optimistic Top-Line Estimates
The Zacks Consensus Estimate for the company’s 2024 revenues is pegged at $2.8 billion, indicating 18.1% growth from the year-ago reported level. For 2025, the top line is pegged at $3.3 billion, suggesting a 17.7% year-over-year increase.
Grab the Stock Now
Grab Holdings is dominant in Southeast Asia and it leverages the growing opportunities that the region has to offer. The company’s financial service business has immense growth potential and it can capture a significant market position, thereby competing head-on with traditional banking companies. GRAB’s platform is a one-stop shop that facilitates efficient cross-selling, allowing it to grow. The stock looks cheap and has a robust liquidity position. Its top-line prospects look optimistic as well.
We believe that GRAB is a worthy candidate for your long-term portfolio. Hence, investors should not be hesitant and should buy the stock right now.
Image: Bigstock
Grab Holdings Gains 24% in 3 Months: Is it Time to Buy the Stock?
Grab Holdings Limited’s (GRAB - Free Report) stock has gained 23.7% in the past three months, outperforming the 18.5% rally of the industry and the marginal rise of the Zacks S&P 500 composite.
Three Months Price Performance
GRAB’s performance is higher than that of its industry peers, Bitfarms Ltd. (BITF - Free Report) and Coursera, Inc. (COUR - Free Report) . BITF has declined 15.7%, while COUR has gained 9.9% in the past three months.
As of the last trading session, the Grab Holdings stock closed at $4.5, declining 26.7% from the 52-week high of $5.7.
Considering the rise in GRAB prices in the past three months, investors might be attracted to buy the stock. However, the question of whether to buy the stock or not needs to be answered. Let us analyze it further.
Rising Opportunities for GRAB in Southeast Asia
Grab Holdings is completely dominant in Southeast Asia. Acquiring Uber’s Southeast Asia operations provided a competitive advantage that was lacking from its competitors. In the third-quarter 2024 earnings call, management remarked that the company is approximately 4 times larger than its closest competitors in the mobility market. GRAB enjoys a dominant position in the delivery market despite tackling more competition.
The company’s growth in the Southeast Asia region has not saturated yet. Rather the surge in population and improving middle-class economic health are acting as strong tailwinds for Grab Holdings. Management anticipates that two-thirds of the Southeast Asia population lacks access to banking and financial services partially or completely. This gives a clear-cut idea of the opportunities ahead to GRAB in the financial services division.
We believe that Grab Holdings’ current dominant position can only get better in the future. The quality of data that the company has in terms of customer spending habits, ride-hailing history, location of customers, and many more allows it to come up with and deploy strategies that could cater to the rising demand.
We have found that many customers gravitate toward GRAB due to the quality of its mobility and delivery segments. This indicates that the company’s financial services business in Southeast Asia has immense potential to grow further and capture a huge market share, challenging traditional banking giants.
Grab Holdings’ Effective “One-Stop-Shop” Strategy
GRAB has created a “one-stop-shop” platform that encompasses a variety of services, including food delivery, ride-hailing, grocery shopping and financial services. This provides effective GrabFood to GrabMart cross-selling opportunities. GrabMart grew 1.7 times faster than GrabFood in the third quarter of 2024.
If a customer is both GrabMart and GrabFood user then the customer’s frequency is 5 times higher than those who only use GrabFood. This results in higher customer retention. If the customer is a subscriber, then the retention is 2 times higher. Management anticipates cross-selling to continue to be a strong source of growth.
Existing users of GRAB’s food and mart services become potential customers for the financial services provided by the company. This lowers customer acquisition costs better than traditional marketing efforts.
GRAB Stock Looks Cheap
The Grab Holding stock looks inexpensive and appealing to investors. It is priced at 5.5 times forward 12-month sales per share, which is lower than the industry’s average of 7 times.
Grab Holding’s Liquidity Beats Industry
The company has a strong liquidity position, with a current ratio of 2.7 at the end of the third quarter of 2024, higher than the industry’s 2.16. A current ratio above 1 suggests that the company can easily pay off its short-term obligations.
GRAB’s Optimistic Top-Line Estimates
The Zacks Consensus Estimate for the company’s 2024 revenues is pegged at $2.8 billion, indicating 18.1% growth from the year-ago reported level. For 2025, the top line is pegged at $3.3 billion, suggesting a 17.7% year-over-year increase.
Grab the Stock Now
Grab Holdings is dominant in Southeast Asia and it leverages the growing opportunities that the region has to offer. The company’s financial service business has immense growth potential and it can capture a significant market position, thereby competing head-on with traditional banking companies. GRAB’s platform is a one-stop shop that facilitates efficient cross-selling, allowing it to grow. The stock looks cheap and has a robust liquidity position. Its top-line prospects look optimistic as well.
We believe that GRAB is a worthy candidate for your long-term portfolio. Hence, investors should not be hesitant and should buy the stock right now.
GRAB sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.