Grab Earnings: Another Strong Quarter, Robust Growth Expected Into Next Year; Shares Undervalued

We maintain our fair value estimate of $4.40 for Grab after it posted strong third-quarter revenue of $615 million that was better than our estimate of $570 million and Refinitiv consensus’ $591 million. Furthermore, its operating loss margin narrowed to 10.7%, which was also 200 basis points better than our forecasts. The company raised its full-year revenue midpoint guidance to $2.32 billion from $2.25 billion, given the strong results. With two consecutive quarters of strong results and guidance raises, we believe the current entry point as of Nov. 10 represents an attractive 34% upside to our fair value estimate. This is given Grab’s dominant position of its mobility unit in Southeast Asia and also the two long-term revenue growth catalysts in its new advertising business and reacceleration of delivery business. We estimate its gross transactional value, or GTV, to grow by double digits in 2024.