Grab Holdings Limited (GRAB): A Bull Case Theory

We came across a bullish thesis on Grab Holdings Limited (GRAB) on GabGrowth’s Substack. In this article, we will summarize the bulls’ thesis on GRAB. Grab Holdings Limited (GRAB)’s share was trading at $4.98 as of 9^th June. GRAB’s trailing and forward P/E were 498 and 89.29 respectively according to Yahoo Finance.

Grab is often dismissed as a low-margin player in a crowded market, but a closer look reveals a much stronger investment case. The company trades at a seemingly high 23.5 P/FCF ratio, yet nearly 30% of its market cap consists of cash, significantly distorting valuation metrics. Evaluated through an EV/FCF lens, Grab’s multiple is far more reasonable. More importantly, the company intends to leverage its ~$6B cash hoard to acquire Gojek, its primary competitor in Indonesia, potentially increasing revenue by 33% while achieving cost synergies and enhancing profitability.

Critics argue that Grab remains unprofitable and reliant on subsidies, but this view is outdated. The company has reached an inflection point where it is both free cash flow positive and profitable, boasting a dominant market share across Southeast Asia in mobility, deliveries, and fintech. Improved take rates and rising demand have further strengthened its financial position, with monthly transacting users increasing for nine consecutive quarters.

Grab’s competitive moat is another misunderstood aspect. While early-stage competition was driven by aggressive incentives, the ecosystem has now matured. Grab’s market share is nearly four times larger than its closest rivals, granting it superior asset utilization and cost advantages. Its SuperApp model further fortifies its position, integrating mobility, food delivery, financial services, and digital banking into a seamless ecosystem, reducing customer acquisition costs and increasing stickiness.

Far from being just a ride-hailing app, Grab has evolved into a diversified platform. Deliveries now constitute 53% of revenue, mobility 37%, and financial services 9%. Emerging verticals such as GrabMart, GrabExpress, and digital banking add incremental growth. Additionally, GrabAds, a high-margin segment, is expanding rapidly, capitalizing on Southeast Asia’s growing digital ad spending market.

Investors who look beyond outdated perceptions will find a profitable, strategically positioned enterprise with compelling upside potential.

Previously, we highlighted a bullish thesis on Grab Holdings Limited (GRAB) by amitisinvesting on X.com, emphasizing its super-app moat, GAAP profitability, and founder-led execution. The stock price of GRAB has appreciated by roughly 5% since. Meanwhile, GabGrowth’s thesis focuses on undervalued financial metrics and Grab’s potential Gojek acquisition for revenue expansion and cost synergies.

Grab Holdings Limited (GRAB) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 56 hedge fund portfolios held GRAB at the end of the first quarter which was 57 in the previous quarter. While we acknowledge the risk and potential of GRAB as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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