By Grab Holdings Ltd (NASDAQ: GRAB) reported a strong third quarter this morning as investments it’s been making across the business helped accelerate its on-demand gross merchandise value.
The multinational also increased the number of monthly transacting users on its platform to 42 million in Q3.
Still, Peter Oey – its chief of finance continues to see Southeast Asia as “a very underpenetrated market for Grab.”
Investors are responding positively to his remarks as they signal significant further room for the company to grow in a region where it already has a solid footprint.
Grab stock is up more than 10% following the earnings release on Tuesday.
Grab stock up on raised guidance
Grab currently operates across 700 cities and eight countries in Southeast Asia – a region that it’s convinced will continue to drive growth over the long term.
“We’re seeing very strong demand … as we look at October alone, we’re seeing good momentum in our business,” CFO Oey told CNBC in an interview today.
His confidence was also reflected in the guidance the technology company issued on Tuesday.
Grab now forecasts its revenue to fall between $2.76 billion and $2.78 billion in 2024. Analysts, in comparison, were at $2.755 billion.
Note that the mobility company came in ahead of Street estimates in its fiscal Q3 as well.
Grab to benefit from an increase in tourism
Grab is fairly positioned to be a key beneficiary as Southeast Asia continues to attract tourists from all over the world.
The Nasdaq-listed firm counts financial services as its fastest-growing business and expects it to remain a key driver of future growth.
Grab tripled deposits to over $1.0 billion in the third quarter while its loan book grew an exciting 80% on a year-over-year basis.
The company’s non-bank business is strongly profitable and it expects its bank business to break even in the back half of 2026.
“We’re going to continue to make sure that we have product adoption and also serving our customer base and driving scale and also efficiency in our financial services business,” the chief financial officer said on “Squawk Box Asia” on Tuesday.
Does Grab stock have any upside left?
Last month, analysts at Daiwa assumed coverage of Grab stock with an “outperform” rating with an upside to $4.60 – a price target it has already hit after reporting earnings today.
Bernstein also raised its price objective on the Singapore headquartered firm in October, citing tourism as a significant potential driver of future growth.
Grab shares may be worth owning as the management “delivered our 11th consecutive quarter of adjusted EBITDA improvement, second positive profit for the quarter, and highest quarterly adjusted free cash flow to date,” on Tuesday.
The multinational technology company does not currently pay a dividend, though.
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