Uber versus Grab - Which is a Better Buy?

🌟🌟🌟$Uber(UBER)$  share price has skyrocketed 15% in the past 5 days and is up 96% year todate.   Uber has just reported its 3Q 2023 revenue today that  showed a profitable company with revenue of USD 9.3 billion, an increase of 11% year over year.  Uber has reported a net income of USD 221 million in 3Q 2023 compared to a net loss of USD 1.2 billion in the previous year quarter.  What an amazing turnaround! 

How did Uber do it?

In Q3 2023, Uber saw total bookings rise from USD 29.1 billion to USD 35.3 billion, a gain of 21%.  Uber's ride hailing adjusted profit rose to USD 1.29 billion, up 43% from USD 898 million in the previous year quarter.  Delivery saw its profitability rose from USD 181 million in Q3 2022 to USD 413 million in Q3 2023.

While food delivery and ride hailing were profitable for Uber this quarter, Uber's freight business fell 27% from the previous year quarter.

Wall Street Analysts are bullish on Uber with a Buy rating, Target price of USD 58.83, an upside potential of 18%.

$Grab Holdings(GRAB)$ 

is due to report its 3Q 2023 earnings on November 9.    Grab's share price is up 2.9% in the past 5 days and but down 8% year todate.  In 2021, Grab was South East Asia's biggest Nasdaq IPO with market capitalisation valued at USD 40 billion.  Today its market capitalisation has dropped to USD 12.38 billion.

Grab remains a lot less profitable than Uber because it is still trying to grow its market share by offering a lot of loss leading incentives to its partners and consumers.  Grab is different from Uber as it has a loyalty program Grab Rewards.  Grab rewards its users when using its services.  Grab has a Super App that offers easy access to users that include deliveries, mobility, financial services and much more.  These services connect consumers from all walks of life with everyday entrepreneurs, providing delightful experiences and fulfilling the everyday needs of millions across 428 cities and 8 countries.

There is Grab Food, Grab Express, Grab Ride Services, Grab Pay and Grab for Business.

Grab launched one of Singapore's first digital banks in partnership with $Singtel(Z74.SI)$ 

Interest is paid daily instead of monthly and small loans can be approved in minutes.

Grab is expected to turn profitable in about 2 years time. It is expecting USD 2.2 billion in revenue in 2023.

Wall Street Analysts are bullish on Grab with a Buy rating, Target price of USD 4.60, an upside potential of 48%.

I believe that Uber is a better buy as it is profitable but Grab has greater upside potential to grow. 

Uber is the Big Brother that leads Grab, the little Brother and show the way how to be profitable.  Being a Singaporean, I am bullish on Grab and wish Grab will achieve its profitability soon and make us proud.

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