Grab Holdings Limited's (NASDAQ:GRAB) Path To Profitability
We feel now is a pretty good time to analyse Grab Holdings Limited's (NASDAQ:GRAB) business as it appears the company may be on the cusp of a considerable accomplishment. Grab Holdings Limited engages in the provision of superapps in Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. The US$14b market-cap company’s loss lessened since it announced a US$434m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$294m, as it approaches breakeven. The most pressing concern for investors is Grab Holdings' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for Grab Holdings
Consensus from 21 of the American Transportation analysts is that Grab Holdings is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$139m in 2025. Therefore, the company is expected to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 54%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Grab Holdings given that this is a high-level summary, though, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 4.7% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Grab Holdings which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Grab Holdings, take a look at Grab Holdings' company page on Simply Wall St. We've also compiled a list of important aspects you should further examine:
Valuation: What is Grab Holdings worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Grab Holdings is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Grab Holdings’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com