Is Grab a Good Buy?
- MSCI will add Singaporean ride hailer Grab and 20 other securities to its flagship global index in a quarterly review.
- The changes will take effect from market close on Feb. 28.
After this news, Grab shares up 14% on the last trading day. Grab debuted on the Nasdaq in December merger with a special purpose acquisition company.
What is MSCI Global Standard indexes?
The MSCI World is a market cap weighted stock market index of 1,546 companies throughout the world. It is maintained by MSCI, formerly Morgan Stanley Capital International, and is used as a common benchmark for 'world' or 'global' stock funds intended to represent a broad cross-section of global markets.
Is Grab a good buy for 2022 and beyond?
Grab wants to become the hub for everyday life for those living in Singapore and the rest of Southeast Asia by offering services that everyone needs daily. The company's core services -- delivery and ride-hailing -- had over $2.8 billion in gross merchandise volume spent on its platform in the third quarter of 2021. Add all three of its services together and the company has 22 million monthly transacting users, leaving Grab plenty of room for growth in a Southeast Asian population of 679 million.
Grab's opportunity is extremely large, but the company has not yet proved it can take full advantage. In the most recent quarter, The company's revenue decreased 9% year over year to $157 million. Management cited short-term pandemic lockdowns in certain countries as the reason revenue fell, but some of its biggest markets -- like Singapore -- are largely open for business due to the high vaccination rates. And despite being a $21 billion company, Grab's margin profile is not good. In the first six months of 2021, the company had a gross margin of negative 28% and posted a net loss of over $1.4 billion, a figure that represents 370% of revenue.
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Can Grab turn in a profit currently? It is actually bleeding cash. Losses in Q3 2021 grew to 988 million dollars. Its core business that is ride hailing and food deliveries profit margin is low as it faces competition from other operators like GoJek and Food Panda.
The good news is that it has been awarded a Digital Banking Licence in Singapore. It continues to scale up its groceries deliveries in SE Asia. Plus a partnership with Lazada to enable same day delivery service via Grab Express in Singapore.
For now I will just put Grab on my watchlist and wait for more positive earnings results from Grab before I buy.
@MillionaireTiger : Is Grab a Good Buy?
@TigerStars
$Grab Holdings(GRAB)$ price action on Daily 14 Feb close up $5.91 is nearing 50SMA $6.61. Would put in some starter positions if it could clear that and add more when it cleared 100SMA around $9.30 [保佑]
Grab is currently facing headwinds that caused its share price to flounder! Its Revenue has dropped 9% since last year and it is still burning cash of almost 1 Billion dollars. Hopefully when Grab Digital Bank is launched things will improve.
For now it is best to wait on the sidelines till things are clearer. It is Good Bye Grab, Not Good Buy Grab! 🤔
@MillionaireTiger : Is Grab a Good Buy?
In Singapore and South East Asia, Grab has a predominant market share of the ride hailing business. However it does not have a wide moat as there are other competitors such as GoJek, Food Panda.
In the meantime it is still bleeding cash to the tune of almost 1 Billion dollars.
In a volatile market, it is more prudent to invest in a profitable company with a wide moat such as Apple. Grab is a riskier option and may cause me sleepless nights.
@MillionaireTiger : Is Grab a Good Buy?
Holding the stock few month already
Bought & Sold using stop loss strategies. On hind sight, Grab was too greedy on market cap when IPO. Furthermore, it is a very labour-intensive biz hence not a good buy.