To The Moon

$Grab Holdings(GRAB)$ is expected to release earnings on November 11, 2024 after the market closes (AMC).

GRAB last reported earnings on 15 August 2024 before the market opened (BMO). GRAB shares declined -7.4% the day following the earnings announcement to close at 3.12. Following its earnings release, 87 days ago, GRAB stock has drifted +35.6% higher. From the time it announced earnings, GRAB traded in a range between 3.12 and 4.44. The last price (4.23) is closer to the higher end of range.

The Singapore-based technology company likely achieved robust on-demand gross merchandise value of $4.57 billion in 3Q, driven by sequential growth across its mobility and delivery segments, Grab's investments in affordable offerings likely continued to generate positive results, they say.

The consensus estimate for Q3 2024 revenue is $692.88 million, and the earnings are expected to come in at -$0.01 per share. The full year 2024's revenue is expected to be $2.75 billion and the earnings are expected to be -$0.04 per share.

Grab Holdings (GRAB) Price Target Forecast

Based on 12 Wall Street analysts offering 12 month price targets for Grab in the last 3 months. The average price target is $4.93 with a high forecast of $7.00 and a low forecast of $4.00. The average price target represents a 16.55% change from the last price of $4.23.

Confidence From Hedge Funds

Hedge Funds has increased their holdings by 38.4M shares in the last quarter. This shows that institutional investors are confident about GRAB’s future as their growth in their respective segment are progressing well.

This should give us confidence that GRAB might be able to move into a profitable quarter starting from Q3.

Investors Very Positive On GRAB

If we looked at how GRAB have performed over the past two weeks, we can see that investors are increasing their GRAB shares holdings, there is an increase of 5.3% over last 30 days on portfolios holding GRAB shares, and there is also a 0.2% increase over the last 7 days.

This investor confidence ahead of GRAB earnings would be helpful as we might be seeing GRAB reporting a profitable quarter.

Path To Continued Profitability Looks Promising

One of the most significant developments in Grab's financial story has been its progress towards profitability. The company reported its third consecutive quarter of positive EBITDA in early 2024, a milestone that has bolstered investor confidence. Analysts are projecting a substantial improvement in EBITDA, with estimates suggesting growth from -$22 million in fiscal year 2023 to $265 million in fiscal year 2024 and $470 million in fiscal year 2025.

The earnings per share (EPS) trajectory is also expected to turn positive, with projections indicating a shift from -$0.04 in fiscal year 2024 to $0.02 in fiscal year 2025. This improvement in profitability metrics underscores Grab's efforts to balance growth investments with financial discipline.

Mobility : Grab's mobility segment has been a strong performer, with recent reports indicating a 27% year-over-year increase in Gross Merchandise Value (GMV). The segment has also shown improved profitability, benefiting from the company's market-leading position and operational efficiencies. The number of Monthly Transacting Users (MTUs) for mobility services grew to 38.5 million, representing a 16% year-over-year increase, driven by various factors including regional events and strategic initiatives.

Delivery : While the delivery segment has faced some seasonal challenges, it continues to be a significant contributor to Grab's overall business. Analysts expect the segment to scale up margins in the medium term as the company leverages its market position and operational improvements. The delivery segment's performance is closely tied to the broader economic conditions and consumer spending patterns in Southeast Asia.

Financial Services : Grab's financial services segment has shown promising signs of improvement, with losses decreasing faster than anticipated. The company's efforts in this area, including the launch of its digibank in Malaysia, are part of a broader strategy to tap into the underbanked populations across Southeast Asia. While the segment is not expected to generate positive EBITDA for at least two years, analysts see significant long-term potential in Grab's fintech initiatives.

Grab has established itself as the leading super-app in Southeast Asia, with a dominant market share in key segments. The company holds approximately 55% share in combined online mobility and delivery services, positioning it to benefit from economies of scale and network effects. This market leadership is expected to drive improved unit economics and margin expansion as competition rationalizes.

The company's hyper-local strategy, which involves building strong government relationships and partnerships with local corporations, has been a key differentiator. This approach has allowed Grab to navigate the complex regulatory landscapes of different countries in Southeast Asia effectively.

The Total Addressable Market (TAM) for Grab's services is estimated at $375 billion, with the company currently capturing only about 4% of this opportunity.

Grab's management has provided guidance that analysts view as conservative, suggesting potential for further upward revisions. The company has raised its fiscal year 2024 EBITDA outlook to $250-270 million from the previous $180-200 million, while maintaining its revenue guidance at $2.70-2.75 billion.

Long-term projections are equally promising, with analysts forecasting a 12% CAGR for GMV from fiscal year 2023 to fiscal year 2026. The company's EBITDA is expected to grow at an impressive 80% CAGR over the same period, reflecting the anticipated improvements in operational efficiency and scale.

Technical Analysis - MACD and Multi-timeframe

We are seeing GRAB trading above the short-term and long-term MA, despite seeing a decline in the MACD which is now in a bearish downside, but we might be able to see GRAB form another bullish MACD upside if we saw an earnings surprise.

I am expecting GRAB to post a better-than-expected earnings which should bring it to a low profitable EPS. Multi-timeframe has not been able to give a confirmed uptrend.

Summary

I would think GRAB is a good position for an earning surprise and EPS might show a profitable beat. There have been good growth on the mobility and financial side for GRAB after we moved out from post pandemic, and with the growth in south-east asian economies, GRAB should be able to grow further.

Appreciate if you could share your thoughts in the comment section whether you think GRAB would provide an earning surprise and give a profitable quarter.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.