Grab Jumps 48% in a Year: Should You Hold or Fold the Stock?

Company Performance - Grab Holdings (GRAB) shares have appreciated 48.1% in the trailing 12 months, outperforming the Zacks Computer & Technology sector's return of 7% and the Zacks Internet - Software industry's rise of 14.8% [1] - In the fourth quarter of 2024, On-Demand GMV grew 20% year over year, or 19% on a constant-currency basis, reaching $5 billion [3] Strategic Partnerships - Grab has partnered with Amazon Web Services (AWS) to enhance growth in mobility, deliveries, and financial services, selecting AWS as its preferred cloud provider in December 2024 [6][7] - The collaboration with OpenAI aims to leverage advanced AI solutions to improve user experiences, customer support, and enhance GrabMaps with automated data extraction [8][9] Clientele Expansion - Grab's growing clientele includes major players like Amazon, BYD, and OpenAI, with a notable partnership with BYD to introduce up to 50,000 electric vehicles (EVs) to Southeast Asia [8][9] Financial Outlook - Grab expects 2025 revenues between $3.33 billion and $3.40 billion, indicating 19-20% year-over-year growth, with the Zacks Consensus Estimate for 2025 revenues at $3.34 billion, implying a year-over-year increase of 19.57% [11] - The Zacks Consensus Estimate for 2025 earnings is pegged at 5 cents per share, which has decreased by a penny in the past 30 days [11] Valuation Metrics - Grab is trading at a premium with a forward 12-month Price/Sales ratio of 5.36X compared to the industry's 5.08X, indicating a stretched valuation [12] Competitive Landscape - Grab faces intense competition in its deliveries segment from regional players like Foodpanda, ShopeeFood, and Gojek, as well as single-market players such as Deliveroo and Line Man Wongnai [15] - Economic uncertainty in key Southeast Asia markets, driven by inflation and changing consumer behavior, is impacting Grab's financial performance [16]