Grab's Strong Quarter and Market Position Suggests It Is Core Emerging Market Investment: Analyst

Benchmark analyst Fawne Jiang reiterated a Buy rating on Grab Holdings GRAB with a price target of $6.

GRAB reported another strong quarter with a topline and bottom line beat and, more importantly, group-level profitability for the first time, a testament to its execution capability to deliver sustainable growth. 

Jiang notes that competence in offering affordable services remains a critical competitive edge in the region. 

As a super-app, a tech-innovator, and a multi-region operator, GRAB is well-positioned to effectively optimize its costs while offering competitive pricing to its customers and warranting earnings for its partners, evidenced by the solid growth of on-demand GMV in 3Q despite the notable reduction in incentives. 

Jiang remains confident in GRAB’s market share gain regardless of macro uncertainty, barring new deep-pocketed entrances. 

Furthermore, mobility and delivery have higher barriers to entry, with local knowledge as a critical competitive differentiator. 

As such, the analyst continues to regard GRAB as a market consolidator in SEA and recommends the stock as a core holding for emerging market (EM) investment. 

Jiang raised his FY23 revenue estimate to $2.34 billion (vs. $2.30 billion prior), implying 63% Y/Y, and adjusted EBITDA to $(20) million (vs. $(38) million prior).

Price Action: GRAB shares traded lower by 0.47% at $3.28 on the last check Friday.