GrowthTurtle
Data Science PhD & IEEE Fellow, Ex-Two Sigma
Grab is cheap against its cash earnings at 23x next year's, while software companies usually get 30x. Fair value sits at $3.93-5.00, or 30x next year's cash earnings give or take 12%, versus $3.65 now, with a PEG of 0.90. It turns expensive above $6.20, with a pullback level at $2.50. This read rests on valuation levels from reported earnings and estimates only. x.comÂ
Grab has about 2x potential through FY29/FY30 but not much more: solid, though less exciting than other names. Revenue of about $8B in FY29 at 19% net margins would give $1.52B of net income, or $0.37 EPS on 4.1B shares. About 20x is fair, against Uber at roughly 18x, given its financial-services potential and Southeast Asia risk, implying $7.40, a 130% gain. A recovery play like Snap may have more upside, with more risk. x.comÂ
Grab's CEO buying about $30 million of stock signals management sees the gap between a falling share price and improving execution. Anthony Tan's first open-market purchase since the IPO came below the prior 52-week low, with COO Alex Hungate also buying. Grab trades near a $7 billion enterprise value against guided $4.2 billion revenue and $720-740 million of adjusted EBITDA, up 44-48%. It is no perfect bottom signal, given noisy GAAP profit and Southeast Asian macro pressure. x.comÂ
Grab's fundamentals are too strong for it not to return to its 200-week moving average at $4.00, a guaranteed 50% gain from where its CEO bought $30 million of stock at $2.70. Its cash alone equals 40% of its market cap, and fair value is $10, a 330% gain from here. x.comÂ
