Grab Holdings Ltd. NASDAQ: GRAB operates a one-stop super app platform offering ride-hailing, delivery and financial services in Southeast Asia. Grab embodies the spirit of the network effect. Customers who are comfortable and satisfied with one service, like ride-hailing, will trust the brand and be more accepting of trying new services, such as food and grocery delivery along with financial services. Cross-selling unrelated services is embedded into the platform.
Grab is a computer and technology sector company that operates an ecosystem comprised of services offered by Uber Technologies Inc. NYSE: UBER, Door Dash Inc. NASDAQ: DASH, Block Inc. NYSE: SQ and Sofi Technologies Inc. NASDAQ: SOFI.
Network Effect: Era of the Super App
$3.60 -0.04 (-1.10%) (As of 06/14/2024 ET)
- Price Target
- $5.07
Grab has built its brand by offering various services integrated under a single ecosystem using a super-app model. The seamless user experience and added convenience have enabled the company to compound its presence throughout Southeast Asia, operating in eight countries, including Singapore, Indonesia, Cambodia, Malaysia, Myanmar, Thailand, Vietnam and the Philippines. Grab grew its monthly transacting users (MTUs) by 16% YoY to 38.5 million in Q1 2024.
It continues to foster loyalty and the network effect with loyalty programs, promotions and discounts. Its diversified offerings enable diversified revenue streams as the company leverages data and technology to optimize pricing, personalize services and improve efficiency.
Daily Cup Breakout Pattern
GRAB formed a daily cup breakout pattern. The cup lip line formed at $3.60 on September 13, 2024, as shares fell to a swing low of $2.90 on January 17, 2024. A rounding bottom formed as shares rejected the cup lip line breakout attempt on February 16, 2024. GRAB finally triggered a breakout on the $3.60 cup lip line break following Q1 2024 earnings, sending shares to a $3.77 high. The daily relative strength index (RSI) surged to the 74-band. Pullback support levels are at $3.60, $3.43, $3.20 and $3.02.
Growth Accelerating
Grab reported a Q1 2024 EPS loss of three cents versus consensus estimates for a loss of a penny, missing estimates by two cents. Revenues spiked 24.4% YoY to $653 million, falling short of the $673 million consensus estimates. On-Demand GMV rose 18% YoY to $4.2 billion. Operating loss was $75 million, a $129 million improvement over the prior year. Adjusted EBITDA hit a record at $62 million, a $129 million improvement over the prior year. The company closed the quarter with $5.3 billion in liquidity, comprised of $5 billion in cash.
Growth by Segment
The Deliveries segment revenue rose 19% YoY to $350 million, driven by robust food deliveries. The Mobility segment revenues rose 27% to $247 million YoY due to increased domestic and tourist travel demand. Financial Services had 53% YoY revenue growth to $55 million, driven by increased lending across its GrabFin and Digibank services.
Reaffirms and Raises Guidance
Grab reaffirmed its full-year 2024 revenue guidance of $2.70 billion to $2.75 billion versus the $2.74 billion consensus estimates. It also raised its adjusted EBITDA for the full year 2024 to $250 million to $270 million, up from the previous estimate of $180 million to $200 million.
Grab CEO and Co-Founder Anthony Tan commented, “Our focus on product-led growth is bearing fruit, with On-Demand GMV scaling to new highs in spite of the seasonal impact we usually see in the first quarter of the year. Our push on affordability and reliability is pulling more people onto our platform and driving up order frequency. We also continue to see our partner earnings trending up.”
Grab Holdings analyst ratings and price targets are on MarketBeat.
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