Grab Holdings stock has continued its strong downward trend this year and is now hovering at its lowest level since 2023. It has slumped by 43% this year and 53% in the last 12 months, underperforming the stock market, which has continued to thrive this year. So, is this a good opportunity to buy this Southeast Asian giant?
Grab Holdings has dropped despite strong growth
Grab Holdings, one of the biggest ride-hailing companies in Southeast Asia, has come under pressure this year. This weakness has coincided with the performance of other similar companies.
Uber Technologies, which holds a stake in Grab, has dropped to $70.8 from a record high of $101.8. Lyft has dropped to $15 from a record high of $89. Didi Global has fallen to $3.67 from a peak of $18.
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Grab’s sell-off has happened as the company changes strategy. It is evolving from being a ride-hailing company into a super application, where customers can get most things, including food and grocery delivery, payments, and loans.
The most recent results showed that Grab’s business is doing well, with its revenue, loan growth, and other metrics improving. Its revenue jumped by 22% to $997 million in the second quarter, with its gross merchandise volume rising by 21% to $6.5 billion.
Most importantly, its fintech business is thriving, with the loan growth rising by 197% YoY to $2.3 billion. This growth was partly because of its Superbank business. It now owns over 50% of the company, which is a large Indonesian bank with digital services. It has over 6 million customers in Indonesia.
Grab’s profit jumped to $235 million, driven by its finance income following the consolidation of Superbank. Its profit was also driven by a $66 million movement in income tax expense.
Analysts tracking Grab Holdings believe that the company’s growth will continue this year. The average estimate is that its annual revenue will jump by 25% to $4.19 billion, followed by $5.19 billion next year. Chances are that its real revenue figure will be higher than this because of its recent purchase of Atome Financial in a $1.49 billion.
There are signs that the company has become undervalued, with its forward price-to-earnings ratio being 21. Its forward price-to-earnings-to-growth ratio is just 0.05, also lower than the sector median of 1.17.
Grab stock price technical analysis
Grab Holdings stock chart | Source: TradingView
The weekly chart shows that Grab shares have plunged in the past few weeks. It slumped to a low of $2.91, its lowest level since 2023.
The stock has slumped below the lower side of the ascending channel. It has also remained below the 50-week moving average and the key support level of $3.20, its lowest level on June 8 this year.
Grab has remained below the Supertrend indicator. Therefore, these technicals suggest that the stock will likely continue falling, potentially to the all-time low of $2.19. This target is about 27% below the current level.
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