Outlook For Grab Holdings
Is Grab a Good Investment?
Since going public grab holdings has had quite poor performance compared to its industry counterparts like $DoorDash(DASH.US$ and $Uber Technologies(UBER.US$. This underperformance is likely due to the fact that this company is based in Singapore.
Technically, the stock's price action hasn't been looking too good for a while. But the financial picture looks like it has been steadily improving. Is it a good time to start accumulating some Grab shares?
Revenue is Steadily Increasing
Since the companies inception, annual revenue streams have been increasing in a big way each year. The revenue growth is even more apparent on Grab's quarterly reports over the past 2 years. Increasing revenue is a sign of growth. That is what you want to see if you want your investment to grow.
The company has yet to turn a quarterly profit, but if revenue continues this upward trend, then we should see a profitable quarter very soon.
Margins Finally Turned Positive
The revenue picture looks good, thanks to the steadily increasing profit margins. For the first time in the companies history, they have achieved positive quarterly margins. This is a very good look for the financial picture.
Big Banks Love the Company
Institutional interest in a company is not the most important thing to look for. It will not dictate the direction of the price action. But it is always nice to see that a lot of very reputable investment banks have allocated some capital towards this company. You can see the full list of institutional investors in the institutional tracker feature.
When you see a company like Uber invested in its potential competition, then that is a plus as well.
Bullish Analysts and Company Guidance
The company has reported guidance of future revenue increases. Most analyst agree as they all have price targets that, on a percentage basis, are much higher than the current price. This is another minor factor contributing to the bullish fundamentals.
Technical Neutrality
When you look at the long-term chart for GRAB, then you will see how the price has remained flat within a long-term price channel for a couple of years.
This is essentially a multi-year base that the price has yet to break out of. The fact that GRAB has not been able to break out is worrisome. But the buildup of volume over the past several weeks has me thinking that a big move may be around the corner. As for which direction, I'm not sure.
The short-term picture looks similar to the longer timeframes. GRAB is essentially flat within a smaller price channel.
Within the price channel, we can see some very strong selling. But each time the price approached support, the buyers stepped in. This makes that support line a key level to watch. If the price drops below it, and the buyers don't step in again, then I would imagine a big selloff would follow. Not just a small selloff.
Is it time to grab some Grab?
Personally, I have never been bullish on this company. But after the recent quarterly filing, I have added it to the watchlist.
I really like the fact that profit margins finally went positive. But the technical picture, aside from being at historically low prices, is still neutral. I like the idea of accumulating some shares at these prices. But if the price drops below either of the short or long-term support levels that I mentioned, then I would minimize some exposure to the ticker in expectation of averaging down I the future.
So what do you think, Moo'ers? Do you think Grab is a good investment?
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SpyderCallOP : @MonkeyGee
check it out. I meant to put this out sooner. I've been busy lately
FANCY PANTS SpyderCallOP: Nice write-up
MonkeyGee SpyderCallOP: Thank you. This an amazing assessment. Very thorough. I have been watching the company for a long time. I used Grab when I was overseas. I found it so much better than Uber. In addition, Grab has become a main source of employment for many of these Asian countries. The workers have very positive feedback about the company. Furthermore, what makes me feel comfortable with investing in GRAB is that it has a great balance sheet with very little debt. They could have milk the company dry if they wanted to like UbER. But we wait and see, I think good news will come soon. Thanks again for the great analysis.
BelleWeather : I thought Grab achieved profitability? And announced a share buyback?
SpyderCallOP BelleWeather: they did have their finally bring in a positive net income last quarter. That is definitely a good thing
AbdulK : I look at there service accordignly rate them for equity buy. The place I live in, the traditional or old taxi fleet are much better still. Grab etc are just headache. I am totally dependent on taxi though for everyday commute, just FYI.
SpyderCallOP AbdulK: Good to know. Thanks for the insight
BelleWeather SpyderCallOP: Yeah, ok, because they had a positive EPS. I read of the buyback in an article, and haven’t seen that myself in DD. I guess it’s just not among my strongest convictions - watchlist for now. I’ll definitely use your guidance on entry and exit, though - thanks, and awesome write up!
BelleWeather AbdulK: Helpful, thanks! Definitely still a watchlist ticker.
Jonnbakoo : Is your time
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