Mizuho Securities analysts initiated coverage on Grab Holdings (NASDAQ:GRAB) with an Outperform rating and a price target of $5 on the stock. The analysts believe that the on-demand mobility and delivery sectors in Southeast Asian markets have significant growth potential, with a large total addressable market (TAM) and currently low penetration rates. As the leading player in this category, Grab is expected to leverage economies of scale and network effects to increase market share and improve unit economics as competition stabilizes.
The analysts forecast an impressive 80% CAGR in EBITDA for Grab over the next three years, supported by these structural advantages. The analysts also find the current valuation attractive, noting that Grab is trading at 11x its projected fiscal 2026 core EBITDA. Despite pressure from major shareholder selling and concerns about increased investments in 2024, the analysts don’t see these issues as structural and consider the stock’s significant discount to its peers as an opportunity for investors.