Grab Holdings Ltd (NASDAQ: GRAB)

Sector: Technology Industry: Software - Application CIK: 0001855612
Market Cap 22.84 Bn
P/B 3.40
P/E 114.22
P/S 6.78
ROIC (Qtr) 2.28
Div Yield % 0.00
Rev 1y % (Qtr) 18.59
Total Debt (Qtr) 1.68 Bn
Debt/Equity (Qtr) 0.25
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About

Grab Holdings Ltd, known as Grab, is a technology company operating a superapp in Southeast Asia, providing various services such as food delivery, ride-hailing, payments, and financial services. The company was established in 2012 as MyTeksi Sdn. Bhd. and has since grown to become the leading superapp in the region. Grab's primary business activities revolve around its superapp, which offers a wide range of services to consumers across eight countries in Southeast Asia, including Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore,...

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Investment thesis

Bull case

  • Strong tangible asset base of 10.93B provides 6.50x coverage of total debt 1.68B, indicating robust asset backing and low credit risk.
  • Short-term investments of 4.13B provide solid 1.23x coverage of other current liabilities 3.37B, indicating strong liquidity.
  • Robust tangible asset base of 10.93B provides 3.16x coverage of working capital 3.45B, indicating strong operational backing.
  • Long-term investments of 1.75B provide solid 4.70x coverage of long-term debt 373M, indicating strategic financial planning.
  • Cash reserves of 3.43B provide solid 15.19x coverage of other non-current liabilities 226M, indicating strong liquidity.

Bear case

  • Operating cash flow of 168M barely covers its investment activities of (782M), with a coverage ratio of -0.21, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (782M) provide weak support for R&D spending of 428M, which is -1.83x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 3.43B provide limited coverage of acquisition spending of (244M), which is -14.07x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 240M relative to inventory of 87M (2.76 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • The company's operating cash flow of 168M shows concerning coverage of stock compensation expenses of 241M, with a 0.70 ratio indicating potential earnings quality issues.

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 235.43 Bn 27.31 5.44 9.50 Bn
2 SHOP Shopify Inc. 147.12 Bn 119.52 12.73 0.19 Bn
3 UBER Uber Technologies, Inc 147.10 Bn 14.63 2.83 12.08 Bn
4 CRM Salesforce, Inc. 122.20 Bn 594.48 15.45 11.14 Bn
5 INTU Intuit Inc. 113.93 Bn 178.01 32.63 6.78 Bn
6 ADBE Adobe Inc. 111.00 Bn 15.57 4.67 6.65 Bn
7 NOW ServiceNow, Inc. 109.54 Bn 62.67 8.25 2.40 Bn
8 ADP Automatic Data Processing Inc 86.44 Bn 20.41 4.07 4.37 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.74 2.08
EV to Cash from Ops. EV/CFO 124.27 11.38
EV to Debt EV to Debt 12.43 47.67
EV to EBIT EV/EBIT 61.40 6.78
EV to EBITDA EV/EBITDA 54.65 7.15
EV to Free Cash Flow [EV/FCF] EV/FCF 239.97 14.44
EV to Market Cap EV to Market Cap 0.91 -8.88
EV to Revenue EV/Rev 6.20 4.04
Price to Book Value [P/B] P/B 3.40 3.65
Price to Earnings [P/E] P/E 114.22 -117.75
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -4.05
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.38
Dividend per Basic Share Div per Share (Qtr) 0.00 0.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.48
Interest Coverage Int. cover (Qtr) 4.79 -43.57
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -58.82 -222.46
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 15.82 281.53
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.78
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 1,281.75 -327.55
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 416.22 30.09
EBIT Growth (1y) % EBIT 1y % (Qtr) 2,990.91 -213.00
EBT Growth (1y) % EBT 1y % (Qtr) 383.16 -86.84
EPS Growth (1y) % EPS 1y % (Qtr) 0.00 108.58
FCF Growth (1y) % FCF 1y % (Qtr) -89.87 6.29
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 24.02 94.58
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.28 0.58
Cash Payout Ratio Cash Payout Ratio 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.74 3.78
Current Ratio Curr Ratio (Qtr) 1.75 8.27
Debt to Equity Ratio Debt/Equity (Qtr) 0.25 0.14
Interest Cover Ratio Int Coverage (Qtr) 4.79 -43.57
Times Interest Earned Times Interest Earned (Qtr) 4.79 -43.57
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 15.30 -105.03
EBIT Margin % EBIT Margin % (Qtr) 10.09 -130.16
EBT Margin % EBT Margin % (Qtr) 7.98 -121.17
Gross Margin % Gross Margin % (Qtr) 43.20 58.37
Net Profit Margin % Net Margin % (Qtr) 5.90 -126.13