Grub Holdings Ltd. NASDAQ: CAPTURE operates a one-stop mobile super app in Southeast Asia that allows consumers to access ride sharing/hailing, food/grocery/parcel delivery, hotel bookings and financial services. The Grab ecosystem currently operates in eight countries: Cambodia, Indonesia, Myanmar, Singapore, Thailand, Vietnam and Malaysia.
In March 2018 Uber Technologies Inc. New York Stock Exchange: UBER decided to exit the carsharing business in Southeast Asia and sold its operations there to Grab Holdings. In exchange, Uber received a 27.5% stake in Grab and a seat on Uber’s board of directors for Dara Khosrowshahi. Since then, the business services company has been growing its services and revenues, and has recently become profitable.
Here are four reasons why you should buy Grab Holdings shares before the end of the year.
1. Grab finally posts net profit in Q3 2024
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(As of 11/22/2024 ET)
- 52 week range
- $2.90
▼
$5.72
- Target price
- $5.42
Grab reported third-quarter 2024 earnings per share of a penny, two cents better than the consensus estimate of a loss of a penny. Revenue grew 17% year over year to $716 million, well above the consensus estimate of $696 million. Gross merchandise value (GMV) rose 15% year over year to $4.7 billion.
The company reported net income of $15 million and adjusted EBITDA reached a record level of $90 million. Net income of $15 million was a sharp reversal from a loss of $99 million in the same period last year. However, net income was largely driven by net financial income of $87 million. Stock-based compensation was $53 million. The number of monthly transaction users (MTU) grew to 42 million during the quarter. This was the first quarter in which Grab recorded a net profit, marking a significant turnaround.
2. Use Excel when using network effects to Cross Selling Services
A network effect is a situation where a product or service becomes more valuable as more people use it. It often starts with a core service or product as a base, and then new services are added by introducing them to existing users to attract more users, etc. Grab initially started as a ride-sharing platform whose main service was ride-hailing. The more passengers used the service, the more drivers joined the network.
Grab then built its ecosystem by adding food delivery (GrabFood), grocery delivery (GrabMart), parcel delivery (GrabExpress), payment processing (GrabPay) and financial services such as (GrabFin) for buy-now-pay. later credit and insurance products. It also offers GrabRewards points for every GrabPay wallet transaction, further driving network effects as one in 20 people in the Southeast Asia region currently uses the Grab super app. Although Grab increased its MTU to 42 million users in the third quarter, this represents only 15% of the total addressable market (TAM). Active users of GrabFood and GrabMart have been shown to have 5x higher order frequency and 2x higher retention rates than users of individual services.
3. Grab raised its forecast for 2024
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$5.42
Growth potential 6.87%Moderate purchase
Based on ratings from 11 analysts
| High forecast | $8.00 |
|---|---|
| Average forecast | $5.42 |
| Low forecast | $4.30 |
Get detailed inventory forecast information
As network effects fueled growth, Grab went ahead and raised its full-year 2024 revenue forecast to a range of $2.76 billion to $2.78 billion, up from its previous forecast of $2.70 billion to $2.75 billion, in line with the consensus estimate of $2 .76 billion. Full-year adjusted EBITDA is expected to be between $308 million and $313 million, up from $250 million to $270 million. million US dollars. Adjusted free cash flow in 2024 will be positive.
The Grab Super app is an all-in-one, unified platform that provides access to transportation, food and financial services. The company had $2.5 billion in cash and $5.8 billion in net cash liquidity at the end of the quarter, compared to $5.3 billion at the end of the previous quarter.
4. GRAB stock triggered weekly symmetrical triangle breakout
A symmetrical triangle consists of a descending resistance line of an upper trend line converging with an ascending support line of a lower trend line at the apex point. A breakout occurs when a stock breaks the upper trend line. A breakout occurs when a stock falls below an ascending lower trend line.
GRAB formed its weekly symmetrical triangle from the March 2022 swing high of $4.09 and the October 2022 swing low of $2.19. The channel continued to narrow as it approached the apex point. GRAB broke out in September 2024, breaking through the $3.60 Fibonacci level and upper resistance line. The weekly flat support VWAP is $3.83. The weekly RSI rose through the 70 band, rising to the 79 band, leading to a breakout. Fibonacci Retracement support levels (Fibo) are at $4.09, $3.60, $3.31 and $2.98.
GRAB’s average target price is US$5.48 and his highest analyst price target is at 8 US dollars. It has nine Buy analyst ratings. The short interest on the stock is 2.52%.
Actionable Option Strategies
Bullish investors may consider using cash-backed puts to buy GRAB at Fibonacci retracement support levels or consider buying. JUMPING at Fibonacci extension levels to capture upside potential without using up all of your stock ownership capital. If LEAPS is deep in the money (ITM), then selling out-of-the-money calls at the beginning of the month will activate Poor Man’s Covered Call Strategy to generate income.
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