Ranjan Sharma, a JPMorgan Analyst believes that the recent pullback of Grab Holdings Ltd. (NASDAQ: GRAB), looks excessive and suggests that a quick recovery is likely.
This week, the ride-sharing company and food delivery service reported disappointing results for its fourth quarter and gave a muted outlook for this year. The share price of both companies dropped by more than 10 percent.
The investment firm is still convinced that Grab will continue to rise in value over the coming months.
Sharma’s price target of $5.60 on Uber rival indicates an increase in value by nearly 15% over current prices.
Grab’s forecast could be conservative
Grab’s guidance for revenue in 2025 was $3.33 to $3.40 billion, citing intense competition. Analysts were at $3.39bn, compared to Grab’s forecast.
The analyst at JPM still recommends that investors buy shares in the Singaporean company, as “it’s guidance could be conservative”.
Grab’s earnings exceeded its guidance last year and the year prior.
Sharma, in a report published recently, argued that “With investors expectations anchored on the guidance we believe earnings will deliver over the course of the year and likely lead to positive revisions in expectations.”
It is important to note that Grab does not pay dividends at this time.
Increased MTUs could lead to a rise in grab stock
JPMorgan is still positive about Grab, also due to the fact that its users are continuing to increase.
Ranjan Sharma believes that this could lead to a rise in earnings later in the year.
We believe that the increase in MTU will expand the market addressable and boost mid-term earnings.
Analysts recommend buying Grab’s stock at a discount, not only because it is expanding its footprint in high-growth advertising.
The Nasdaq listed company is up 60% compared to its 52-week-low.
Grab Shares: Are they worth purchasing in 2025?
Grab’s fiscal fourth quarter revenue was $407 Million, which is slightly less than the analysts’ expectation of $408 million.
The company’s mobile revenue missed Q4 estimates as well.
In early February, it was reported that GoTo and the ride-sharing company were in discussions about a potential merger to increase market share.
Peter Oey said at the time that “Grab doesn’t comment on media speculations or rumours”, adding that the US listed firm had set the bar high for M&A.
Later, GoTo confirmed it was not involved in any discussions about a merger with Grab.
It is important to note that the Grab stock was struggling in the aftermath of pandemic. The stock is currently selling for less than $5, compared to close to $17 at the beginning of 2021.
The post Uber competitor could still deliver 15% growth in 2025, despite Q4’s miss: Here’s why might be updated as new information becomes available.
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