Q3 results beat expectations + full-year guidance raised! Grab (GRAB.US) gets a bullish call from Citi after earnings: the stock could still rise over 92%

Grab (GRAB.US), the Southeast Asian ride-hailing and food delivery giant, reported its Q3 2026 results after the U.S. market close on Monday, November 2. In a research note published subsequently, Citi pointed out that Grab's Q3 results beat expectations, with revenue and adjusted EBITDA coming in above its forecasts, and the company's raised full-year 2026 guidance also topped its expectations. Citi rates Grab "Buy" with a target price of $5.50. That target implies upside of over 92% versus the stock's Monday closing price of $2.86. Results Review The earnings report showed Grab's Q3 revenue rose 27% year over year (up 30% at constant currency) to $1.11 billion, above the consensus estimate of $1.08 billion and Citi's forecast of $1.07 billion. On-demand services (including deliveries and mobility) gross merchandise value (GMV) rose 18% year over year (up 22% at constant currency) to $6.84 billion, slightly above Citi's forecast of $6.80 billion. Group monthly transacting users (MTU) rose 20% year over year to 57.2 million (above Citi's forecast of 54.9 million), corresponding to on-demand services GMV per monthly active transacting user of $135, up 2% year over year. On profitability, adjusted EBITDA reached $237 million, above Citi's estimate of $194 million and the consensus estimate of $193 million. However, profit for the period was $18 million, below the consensus estimate of $129 million and Citi's estimate of $99 million. Grab raised its full-year 2026 IFRS total revenue guidance to $4.15 billion to $4.2 billion, from $4.1 billion to $4.15 billion previously, implying year-over-year growth of 23% to 25%. By comparison, Citi's estimate was $4.15 billion and the consensus estimate was $4.16 billion. Full-year adjusted EBITDA guidance was raised to $790 million to $800 million from $720 million to $740 million previously, implying year-over-year growth of 58% to 60%. By comparison, both Citi's and the consensus estimate were $737 million. By segment, deliveries GMV rose 21% year over year (up 24% at constant currency) to $4.5 billion (above Citi's estimate of $4.44 billion). IFRS revenue was $561 million, or 12.5% of GMV; Q3 2025 revenue was $465 million, also 12.5% of GMV. By comparison, Citi's and the consensus estimates were $538 million and $550 million, respectively. Adjusted EBITDA was $123 million, or 2.7% of GMV, above 2.1% in Q3 2025. By comparison, Citi's and the consensus estimates were $107 million and $102 million, respectively. Mobility GMV rose 14% year over year (up 17% at constant currency) to $2.34 billion (versus Citi's estimate of $2.36 billion). IFRS revenue was $349 million, or 15% of GMV, up 10% year over year (up 12% at constant currency); Q3 2025 revenue was 15.5% of GMV. By comparison, Citi's and the consensus estimates were $355 million and $353 million, respectively. Adjusted EBITDA was $207 million, or 8.9% of GMV, flat with 8.9% in Q3 2025. By comparison, both Citi's and the consensus estimate were $203 million. Financial services total loan volume rose 200% year over year to $2.71 billion. By comparison, Citi's forecast was $2.6 billion, up 188% year over year. IFRS revenue was $201 million, up 124% year over year, or up 132% at constant currency. By comparison, Citi's and the consensus estimates were $179 million and $173 million, respectively. Adjusted EBITDA was positive $12 million, versus negative $28 million in Q3 2025. By comparison, Citi's and the consensus estimates were negative $3 million and negative $2 million, respectively. Other revenue was $1 million, and the segment's adjusted EBITDA was negative $4 million. Citi's View Citi believes Grab's Q3 results beat expectations, with strong performance in monthly transacting users and EBITDA profitability, with adjusted EBITDA 22% and 23% above the firm's and the consensus estimates, respectively. In addition, the company raised its full-year guidance, especially the substantial raise to EBITDA guidance, which surprised the firm given the multiple headwinds the company had previously faced, including foreign exchange volatility and local economic weakness. Deliveries continued to post strong growth, with GMV up 21% year over year and EBITDA margin expanding to 2.7%, clearly beating expectations. Loan growth also exceeded expectations. However, given fuel costs and driver incentives, mobility performance was broadly in line with expectations. Citi's sum-of-the-parts (SOTP) valuation model yields a target price of $5.50 for Grab. The valuation breaks down as follows: 1) On-demand services: $3.50 per share. Based on 2027E adjusted EBITDA of $1.46 billion for the on-demand services business comprising deliveries and mobility combined, applying a 10x valuation multiple, corresponding to a total value of $14.6 billion, or $3.50 per share. Citi's 10x target valuation multiple represents a 30% premium to the average valuation of Asian and global peers; these peers have seen valuation multiple cuts larger than Grab's stock price valuation adjustment. 2) Financial services: $1.14 per share. Based on a 5x valuation multiple applied to 2027E IFRS revenue of $954 million, corresponding to a total value of $4.77 billion, or $1.14 per share. 3) Cash: $0.90 per share. Based on the Q2 2026 cash balance, applying a 30% discount.