Grab's Q1 Earnings: Is Grab Stock a Buy Right Now?

$Grab Holdings(GRAB)$   is set to release its Q1 2025 earnings after the US market closes on April 29th, followed by a conference call on April 30th at 8 AM Singapore time. Market watchers will be scrutinizing their progress on profitability and the overall quality of growth.

Key Takeaways

Analysts are generally forecasting a revenue of around US$767 million for Q1 2025, representing a year-on-year (YoY) increase of about 17.4%. This reflects a continuing expansion of Grab's business. Earnings per share (EPS) are projected at US$0.006, a turnaround from losses, indicating improved profitability. Previously, Grab's Q4 2024 revenue reached US$764 million, a 17% YoY increase that beat market expectations, with Adjusted EBITDA soaring by 173% to US$97 million.

As of April 25, 2025, Grab's share price hovered around US$4.78, a dip from its 52-week high of US$5.72 but a significant rebound from its 52-week low of US$2.98. Recent market volatility has caused short-term fluctuations, reflecting mixed sentiment.

According to Bloomberg, out of 26 ratings agencies, 22 have given Grab a 'Buy' or 'Outperform' rating, with the other four recommending 'Hold'. Evercore ISI has the highest target price at USD 8.

Business Highlights & Growth Drivers

As Southeast Asia’s leading super-app, Grab’s strengths lie in its diverse offerings:

1. Deliveries

Consistent GMV Growth: Analysts at both Barclays and JP Morgan expect a 15-16% YoY increase in deliveries Gross Merchandise Value (GMV) for Q1, driven by rising consumer demand across the region and Grab's expanding market share.

Improved Profitability: Grab is enhancing its deliveries profitability by streamlining operations and adjusting incentive schemes. Barclays projects that the deliveries EBITDA margin will surpass initial forecasts and continue to rise throughout 2025.

2. Mobility

Steady Growth: Despite a high base from the same period last year, Barclays forecasts a 17.5% YoY increase in mobility GMV for Q1, indicating continued robust demand.

Stable Margins: The mobility business has nearly reached its long-term target EBITDA margin of 9% and is expected to remain relatively stable in the coming quarters, with GMV growth driving profitability.

3. Cost Management

Grab's management has consistently demonstrated its ability to effectively manage regional operating costs, and Barclays expects this trend to continue in Q1, providing further support for earnings growth.

4. Product Innovation

Affordable Options: New budget-friendly services are expected to drive customer acquisition and boost GMV.

Travel Pass: Grab could gain a larger share of tourism spending with its Travel Pass, offering a unique value proposition that competitors may find difficult to match.

Strategic Focus & Outlook

Grab CEO Anthony Tan has stated that the company will continue to drive growth and user engagement by leveraging its extensive user base and unique ecosystem. The company's revenue is projected to reach US$3.33 billion to US$3.4 billion in 2025, a 19% to 22% YoY increase, with an Adjusted EBITDA target of US$440 million to US$470 million, a 41% to 50% increase.

Strategically, Grab remains committed to affordable services, strengthening its digital finance and advertising businesses, and improving customer loyalty. The company is also implementing measures such as hiring freezes, salary freezes for senior management, and reduced travel expenses to control costs and achieve sustainable profit growth.

Furthermore, Grab is exploring potential merger opportunities with GoTo Group, which could solidify its leadership position in Southeast Asia.

Risks and Considerations

Despite its strong growth momentum, Grab faces challenges such as intense competition, macroeconomic volatility, regulatory changes, and currency fluctuations. Investors will be closely monitoring the company's ability to maintain profitability, control costs, and navigate market uncertainties. 

JPMorgan believes that trade tensions and tariff policies have created significant macroeconomic headwinds for internet companies, and trade-dependent markets such as Vietnam, Thailand, Singapore, and Malaysia will be disproportionately affected. Nevertheless, JPMorgan thinks that Grab's business may be more resilient due to its relatively affluent customer base.

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