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Grab stock price prediction: is the app making a profit?

By Prachi Sinha

Edited by Vanessa Kintu

11:23, 19 January 2022

PETALING JAYA, MALAYSIA - APRIL 28, 2019. An e-hailing company logo, Grab display at the main Grab headquarters lobby in Petaling Jaya, Selangor.
Grab stock price prediction: is the app making a profit? – Photo: Shutterstock

In 2012, an application called MyTeksi was launched in Malaysia. Within a year, it had become Grab Taxi. The company relocated to Singapore in 2014, and became known as Grab (GRAB).

Touted to be the biggest technology start-up in Southeast Asia, the company believes in creating economic empowerment for everyone in the region. It has offices across eight South Asian countries, including in Cambodia and Thailand.

Grab has been Southeast Asia’s first-ever decacorn company (a privately-held company with a valuation of $10 billion or more). It offers a broad portfolio of services, ranging from deliveries and mobility to financial services.

In its 1 December 2021 press release, the company announced its Nasdaq debut through Altimeter, a special purpose acquisition company (SPAC). Anthony Tan, Grab’s co-founder and CEO said:

 “We truly believe this is Southeast Asia’s time to shine, and we hope that our entrance into the global public market will help bring greater attention to the tremendous opportunity here in the region.”

The stock made its debut at $13.06, and rallied 1.76% to an intra-day high of $13.29. However, it closed its first day trading at $8.75 – a 33% fall. Join us as we find out what lies ahead for this super app company, undertake a Grab share price forecast and get analyst insights on the Grab expected share price.

Grab fundamental analysis

On 11 November 2021, the company published its Q3 2021 financial results for the three months ended September 2021. Due to strict lockdown conditions in Vietnam and other South Asian regions during, Grab’s revenue numbers were down.

The $157m in revenue reported for Q3 2021 was an almost 9% year-on-year (YoY) fall from Q3 2020 revenue of $172m. From its four reportable market segments - deliveries, financial services, mobility and enterprise - top-line growth was only seen in two: deliveries and financial services.

Revenue through deliveries grew by 58% from Q3 2020, coming in at $49m for Q3 2021 . Similarly, revenues generated from financial services rose to $14m – an 11% YoY increase.

On the flip side, the mobility business fell by 26% to $88m from Q3 2020. On the enterprise segment, YoY revenue loss was 37%, coming in at $7m for Q3 2021.

Bottom-line losses for Q3 2021 were $988m, a 59% growth from Q3 2020 losses of $621m. A primary contributor was the company’s non-cash expenses, which included fair value changes on investments and interest accrued on Grab’s convertible redeemable preference shares. A major portion of these non-cash expenses is expected to be eliminated with the culmination of Grab and SPAC Altimeter business combination.

However, in a positive piece of Grab stock news, its gross merchandise value (GMV) touched a quarterly high of $4bn in Q3 2021. From Q3 2020 GMV of $3.061bn to Q3 2021 GMV of $4.03bn, significant YoY growth of 32% was recorded. Furthermore, deliveries GMV grew by 63% since Q3 2020 and reached $2.3bn.

GMV increase YoY

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Despite the fall in overall revenues and higher losses in Q3 2021, Grab’s co-founder and CEO remained optimistic of the brand’s future, saying:

“Despite severe lockdowns in Vietnam and heightened restrictions across the region in the third quarter due to Covid-19, we executed well on our superapp strategy and delivered strong growth. With recovery in sight, and the gradual reopening of economies providing tailwinds to our business, we are doubling down on investments that will help us capture a greater share of the opportunities in front of us and open up new addressable markets for Grab, such as groceries.”

Grab stock price movements

Grab announced its decision to go public through a shell company, Altimeter Growth, for $39.6bn in April 2021. At the time, it was the largest ever US equity offering by a Southeast Asian company.

However, on its first day of trading on the Nasdaq, the Grab stock price chart reported a 33% fall from $13.06 to $8.75. Within the first week, the stock had lost 7.65%, closing at $8.08 on 9 December 2021, down from its 2 December 2021 close price of $8.75.

As per S&P, the short-term outlook for the Grab stock market appears to be gloomy – the company may not begin generating positive operating cash flows until 2023. In its December research note, S&P gave the company a B- rating, noting: 

“We continue to expect Grab’s credit profile to be constrained by a lack of track record in generating positive free cash flows and sustaining profitable operations. This is because the company continues to be loss-making.”

At the time of writing (18 January 2022), the stock had last closed at $6.04. As compared to its opening price of $13.06 as on NAsdaq debut on 2 December 2021, the stock has plummeted by 53.75%.

GRAB stock price chart

Grab stock price forecasts

At least four Wall Street analyst predictions, as compiled by TipRanks, suggest a consensus price target for the 12-month at $11.25. The stock projection varied from the low of $10 to the high of $12.50. The average price target represents an 86.26% upside change from the last trading price of $6.04.

However, according to the algorithmic forecasting of Wallet Investor, as of 18 January 2022, the Grab stock price target could potentially decline to $0.0535 by April 2022. Wallet Investor is bearish on the Grab stock value. It doesn’t offer its stock value beyond August 2023, suggesting a closing price of $0.000001. This restricts our scope to provide Grab stock prediction price for 2025-2030.

Milan Vaishnav, CMT, MSTA, a Consulting Technical Analyst at Gemstone Equity Research & Advisory Services, shared a technical analysis for Grab, saying:

“The stock has a relatively less technical price history. It has been under a consistent and strong decline from 17.15, the lower top that it formed after the high point of 18.11. Although the stock is oversold, it is not likely to see anything structural except a few technical bounce backs. This stock is best avoided as there are no triggers as of now that would warrant/justify fresh entry at the current levels.”

On 6 December 2021, JPMorgan initiated its coverage on Grab stock as ‘overweight’ and set a price target of $12.50. Citigroup has a ‘buy’ rating on the stock as well, with a price target of $12 as of 15 December 2021. As of 30 December 2021, Jefferies set a price target of $10.50 and recommended a ‘buy’.

When looking for Grab stock price forecasts, it’s important to bear in mind that analysts’ forecasts and price targets can be wrong. Each analysts’ Grab stock analysis is based on making fundamental and technical studies of the stock’s performance. Past performance is no guarantee of future results.

FAQs

Is GRAB a good stock to buy?

According to data compiled by Tip Ranks, based on four Wall Street analysts, all of them have given this stock a ‘buy’ recommendation. Since its debut on the Nasdaq on 2 December 2021, the stock has fallen by more than 50%, as of 18 January.

Note that analyst predictions are often wrong. Forecasts shouldn't be used as a substitute for your own research. Always conduct your own due diligence before investing. And never invest or trade money you cannot afford to lose.

Will the GRAB stock go up or down?

According to algorithmic-based application Wallet Investor, the Grab share price could potentially close at $0.0535 by April 2022. Furthermore, by August 2023, the stock price could go as low as $0.00001.

Markets in this article

GRAB
Grab Holdings Limited
3.3888 USD
-0.04 -1.180%

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