Street Calls of the Week
Investing.com - HSBC downgraded Grab Holdings Inc. (NASDAQ:GRAB) from Buy to Hold on Wednesday, citing valuation concerns after the stock’s significant rally over the past year. The stock currently trades at $6.32, just shy of its 52-week high of $6.42, with InvestingPro data showing the shares are trading in overbought territory.
The firm raised its price target slightly to $6.20 from $6.00, noting that Grab shares have surged approximately 77% over the past 12 months, substantially outperforming the NASDAQ’s gain of around 27% during the same period. Recent momentum has been particularly strong, with the stock posting a 19% gain in just the past week.
HSBC analyst Piyush Choudhary indicated that Grab’s current valuation metrics appear stretched, trading at 0.81x EV/GMV, 27.6x EV/EBITDA, and 80x PE for 2026 estimates, with its 12-month forward EV/GMV approaching two standard deviations above mean levels.
Despite the downgrade, HSBC increased its GMV forecasts for Grab by approximately 2% and EBITDA estimates by roughly 1-4% for the 2025-2027 period, reflecting expectations that the company will gain market share in the on-demand segment due to its investments.
The firm characterized the risk-reward profile for Grab as "balanced" based on its scenario analysis, suggesting limited upside potential at current valuation levels despite positive operational outlook.
In other recent news, Grab Holdings Ltd reported its Q2 2025 earnings, aligning with expectations for earnings per share (EPS) and slightly surpassing revenue forecasts. The company announced an EPS of $0.01, which matched analyst predictions. Revenue for the quarter reached $819 million, slightly exceeding the anticipated $812.79 million. These results mark a steady performance for the company amidst challenging market conditions. Analysts had projected these figures, and the company managed to deliver accordingly. Despite the positive earnings report, the company’s stock experienced a decline in after-hours trading. Investors may find it noteworthy that the revenue exceeded expectations, reflecting a potential area of interest for future analysis. These developments highlight Grab’s ongoing efforts to meet market expectations.
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