Grab Holdings’ Stock Gains Momentum
There are more gains to come in Grab Holdings’ stock after a 35 per cent surge so far this quarter, according to some analysts.
Reasons for Optimism
The ride-hailing and delivery firm will boost its profit as it fends off competition and benefits from scale, according to Evercore ISI International, which recently raised the stock’s price target to US$8 from US$7. That implies a 56 per cent upside from the shares’ current level. Analysts expect the company to swing back to a US$6.5 million operating profit in the current quarter, from a US$38 million loss in the preceding three months, according to data compiled by Bloomberg.
Challenges Ahead
Singapore-based Grab, whose stock rally this quarter made it the global outperformer in its sector, may finally be fulfilling years of promises as it has achieved dominance in South-east Asia’s ride-hailing and online food delivery sales, warding off its major rival GoTo Group from Indonesia.
Despite the latest turnaround, the challenge will be for Grab to continue amassing users in the region, with a long runway ahead to reach the same level of penetration in South-east Asia that Uber Technologies has achieved in the US, according to Bloomberg Intelligence analyst Nathan Naidu.
Analysts’ Views
The company’s continued strength in its core services, paired with an escalation in its digital banks’ growth, will build momentum in the fourth quarter, said Maybank Securities analyst Hussaini Saifee. Grab’s scale advantage, which smaller players lack, has helped it spend less to incentivise customers and gain income opportunities for its drivers, analysts say.
Conclusion
Grab Holdings’ stock is expected to continue its upward trend as analysts remain optimistic about the company’s prospects. With a 56 per cent upside implied by Evercore ISI International, investors may want to consider adding the stock to their portfolios.
Frequently Asked Questions
Q: What is the current price of Grab Holdings’ stock?
A: The current price of Grab Holdings’ stock is US$5.13.
Q: What is the implied upside by Evercore ISI International?
A: The implied upside by Evercore ISI International is 56 per cent, from the current price to a target price of US$8.
Q: What is the main challenge facing Grab Holdings?
A: The main challenge facing Grab Holdings is the need to continue amassing users in the region, with a long runway ahead to reach the same level of penetration in South-east Asia that Uber Technologies has achieved in the US.
