Grab Holdings Stock Before Q4 Earnings: To Buy or Not to Buy?

Grab Holdings Limited GRAB will report its fourth-quarter 2024 results on Feb. 19, after market close.

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The Zacks Consensus Estimate for earnings in the to-be-reported quarter is pegged at a penny, the same as that reported in the year-ago quarter. The consensus estimate for total revenues is pinned at $762.6 million, implying 16.8% year-over-year growth.

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GRAB has a negative earnings surprise of 29.2%, on average.

Grab Holdings Limited Price and EPS Surprise

Grab Holdings Limited price-eps-surprise | Grab Holdings Limited Quote

GRAB’s Higher Chance of Q4 Earnings Beat

Our model predicts a likely earnings beat for Grab Holdings this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

GRAB has an Earnings ESP of +100.00% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Customer-Centric Products to Have been GRAB’s Drivers in Q4

The products offered by Grab Holdings cover all tiers of customers. In the Mobility segment, GRAB’s Saver Delivery and Saver Ride-hailing are affordable options that are anticipated to have propelled the company’s Monthly Transacting Users, thereby boosting its top line.

In the Deliveries segment, Grab Holdings resorts to a balanced approach in growing Saver and Priority Deliveries services. While Savers are more price sensitive, they are more active in re-ordering with a frequency approximately double that of non-Savers. This segment is anticipated to have been driven by higher spending and frequency in GradUnlimited Subscribers.

Grab Holdings Stock Looks Pricey

GRAB shares have soared 59.6% in the past six months. It has underperformed the 80.4% rally of its industry while outperforming the 11.1% rise of the Zacks S&P 500 composite.

Six Months' Price Performance

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It has outperformed its industry peers, Distribution Solutions Group, Inc. DSGR and Cricut, Inc. CRCT. DSGR has declined 11.6% and CRCT has fallen 2% over the same period.

The stock is looking pricey due to the recent surge, currently trading at a trailing 12-month price-to-earnings ratio of 76.2X, well above the industry’s 51.1X.

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Grab Holdings’ Investment Considerations

The company enjoys a dominant position in the Southeast Asia region. After Uber’s Southeast Asia operation buyout, Grab Holdings has solidified its position in the market. Despite being the major player, its growth trajectory does not seem to have plateaued. Rather, the population boom and improving middle-class economic health are acting as strong tailwinds.

We believe that the data quality in terms of customer spending habits, ride-hailing history, customers’ location and other information will allow it to meet the rising demand, thereby improving its financial health. However, the stock’s overvaluation and reluctance to pay dividends might strike a wrong chord for investors.

GRAB the Stock Later

Grab Holdings’ customer-centric approach, coupled with the booming opportunities to be exploited in the Southeast Asia market, pave the path for long-term growth potential. However, timing the market entry is crucial for maximizing investment returns.

While GRAB remains fundamentally strong, a better entry point could emerge if the stock undergoes some correction.

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Cricut, Inc. (CRCT) : Free Stock Analysis Report

Grab Holdings Limited (GRAB) : Free Stock Analysis Report

Distribution Solutions Group, Inc. (DSGR) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.