Soaring Expansion Path, Yet Wary of Valuation and Compensation Spending Levels
In a rollercoaster year for U.S. markets, it's been smart to invest in international growth stocks, none more so than Grab Holdings (GRAB). Over the past few months, this dynamic company has steered clear of the market turmoil that's plagued U.S. stocks like Lyft.
GRAB has been on a tear, powered by its diverse expansion across various sectors. Let's dive into its financials for Q1 2025:
- Revenue: With a whopping $773 million in revenue, GRAB saw a 18.4% year-over-year increase, largely due to growth in Deliveries ($415M, +18% YoY), Mobility ($282M, +15% YoY), and Financial Services.
- Profitability: The company reported a net income of $10 million, with a positive free cash flow of $47 million, a significant shift from the previous year.
- GMV Growth: Deliveries GMV jumped 16% YoY to $3.13 billion, while Mobility GMV grew a healthy 17% to $1.8 billion.
What makes GRAB a standout? Let's take a look:
- GrabMart Dominance: During Ramadan in March 2025, GRAB racked up record GMV thanks to family accounts and pooled orders.
- Merchant Expansion: In Q1, advertisers on GRAB's Deliveries platform shot up by 49% YoY to 191,000, giving the platform extra stickiness.
- Cost Discipline: By reining in incentives and focusing on improving unit economics, GRAB managed to stay profitable.
Of course, there are risks to consider:
- Valuation Concerns: With high forward multiples compared to near-term earnings potential, investors may view GRAB as overvalued.
- Regulatory Pressures: Mandates like the Eid bonus in Indonesia can cause stock price fluctuations, highlighting potential regional policy risks.
Now, let's compare GRAB to its U.S. counterpart, Lyft.
- Diversification: GRAB's three-segment business model (Deliveries, Mobility, Financial Services) makes it more resilient, while Lyft mainly focuses on ride-hailing.
- Market Volatility: Lyft's shares have taken a beating in 2025, whereas GRAB has benefited from Southeast Asia's growth narrative and a steady cash flow.
- Profitability Trajectory: GRAB recently turned net profitable, whereas Lyft is still prioritizing market share over short-term earnings.
Looking ahead, analysts believe that GRAB's synergies across its ecosystem and cost-cutting measures will keep the growth train rolling. However, valuation remains a talking point for some. For Lyft and other U.S. peers, competitive pressures and a rocky economic environment present greater near-term hurdles.
- In Q1 2025, Grab Holdings (GRAB) demonstrated resilience against market turmoil that affected stocks like Lyft, posting a net income of $10 million and positive free cash flow of $47 million.
- GRAB's diversified business model, encompassing Deliveries, Mobility, and Financial Services, contributed to a significant 18.4% year-over-year revenue increase, reaching $773 million.
- By contrast, Lyft primarily focuses on ride-hailing, making it more susceptible to market volatility. Reflecting this disparity, GRAB's shares have outperformed Lyft's in 2025.
- Despite analysts' optimism about GRAB's future, valuation concerns linger, with some investors regarding GRAB as overvalued due to high forward multiples compared to near-term earnings potential.
