If you stopped tracking Grab Holdings (NASDAQ: GRAB) after its 2021 SPAC listing, you probably still think of the Singapore‑based “super‑app” as a cash‑hungry, heavily subsidized ride‑hailer.
Fast‑forward to mid‑2025 and the picture has flipped. In the March quarter, revenue jumped 18 % year over year to US $773 million and, for the first time in a first quarter, the company booked a GAAP profit of US $10 million while generating a record US $106 million in adjusted EBITDA, its thirteenth straight quarter of improvement.
That early profitability milestone, combined with positive operating cash flow of US $936 million on a trailing‑twelve‑month basis, explains why the shares have rallied more than 6 % over the past twelve months to around US $5. The obvious question now is whether they can stretch to US $10, effectively doubling from here.
A Valuation Floor Most Investors Missed
One clue sits inside a June financing nobody is talking about. Grab issued US $1.5 billion of zero‑coupon convertible notes that can only be exchanged for equity at US $6.55 a share, about 40 % above the price when the deal was struck. Bond investors, typically the least romantic people on Wall Street, don’t agree to that kind of premium unless they see a realistic path to conversion. Crucially, management earmarked part of the proceeds for share repurchases, pledging to exhaust the US $274 million still unused under the existing buyback authorization.
Those repurchases are not theoretical. By the end of 2024 Grab had already retired 67 million shares for US $226 million, shrinking the float by roughly 1.6 %. Fewer shares plus faster earnings growth is a potent combination, and one that creates a soft valuation “floor” near the conversion price. If the stock slides, management can mop up more shares; if it rallies through US $6.55, bondholders will gladly convert, providing the equity liquidity needed for another leg higher.
Hidden Levers in Mobility and Deliveries
Grab’s on‑demand empire, including ride‑hailing and food delivery, still drives the bulk of revenue, and here the company has found margin nobody expected.
In the latest quarter Gross Merchandise Value expanded 16 % to US $4.9 billion even though partner incentives grew just 9 % year over year.
Simply put, Grab is moving more transactions without juicing the platform with costly coupons. As the incentive ratio normalizes toward the single‑digit levels Uber enjoys in the United States, every percentage point trimmed adds roughly US $50 million to EBITDA, thanks to the scale of GMV.
Management’s 2025 guidance calls for US $3.33 billion to US $3.40 billion in revenue and US $460 million to US $480 million in adjusted EBITDA, numbers already nudged higher after the first‑quarter beat.
At the midpoint, EBITDA would climb about 50 % in a single year. Investors pay about 31 × forward EBITDA today, US $14.9 billion enterprise value divided by US $470 million. That multiple looks lofty until you remember Uber still fetches roughly 35 × despite operating in mature markets and facing slower growth.
The Underrated Digital‑Bank Flywheel
The other margin lever sits in financial services. Grab’s GXS Bank tripled deposits year over year to nearly US $1.1 billion by late 2024, a figure that has continued to swell as the bank raised individual deposit caps to S $95,000 in March.
What matters is that these deposits cost Grab an average of just 1.7 %, well below regional funding costs, while the associated loan book soared 56 % in the March quarter.
Because the super‑app already knows when users are about to get paid, hail a ride, or order lunch, its credit algorithms boast a non‑performing‑loan ratio of under 1 %, according to prepared‑remarks comments dissected by Maybank.
That lets Grab price micro‑loans at interest spreads north of 700 basis points, a level traditional banks can only envy. As deposits and loans compound, management believes fintech could eventually contribute 25 % of group EBITDA, an upside that remains almost invisible in sell‑side models.
Cash to Burn In a Good Way
Even before selling the convertible notes, Grab finished 2024 with US $6.1 billion of gross cash and US $5.3 billion in net cash.
Maybank now estimates the war‑chest at US $7.7 billion, equal to 37 % of the company’s enterprise value, after factoring in note proceeds.
That cushion gives management three key options that could each light a fire under the stock:
The first is tuck‑in acquisitions, and the second is aggressive buybacks beyond the current US $500 million plan. Bolt‑on fintech licences in markets like the Philippines, where regulators are limiting new entrants.
Any of those moves would be earnings‑accretive, thanks to the balance‑sheet strength.
Modeling a Path to Ten Dollars
Let’s stress‑test the doubling thesis. Suppose revenue grows at the low end of guidance of 17 % this year and 15 % in 2026‑27, while adjusted EBITDA margin improves from 14 % today to 18 %, still 500 basis points below Uber’s.
EBITDA would surpass US $800 million by 2027. Keep a conservative 25 × multiple, a discount to Uber, and the implied enterprise value tops US $20 billion.
With net cash likely exceeding US $8 billion by then, equity value would hover around US $28 billion. Divide by a post‑buyback share count of roughly 4.0 billion and you land at US $7 per share.
That alone is a 40 % lift, and it makes no allowance for fintech scaling faster, GoTo synergies, or incentive ratios falling further. Layer in any one of those upside triggers and a US $10 bull‑case price within three years moves from hopeful to plausible.
Short‑Circuit the Story
Of course, a path to doubling is not a guarantee. Indonesia remains fiercely competitive, ShopeeFood and GoTo’s Gojek are both subsidizing delivery fees again.
Currency swings might well shave nominal growth, and digital‑bank profitability targets rely on persistent benign credit conditions. Perhaps the biggest wild card is regional regulation, a higher cap on interest rates or a ban on gig‑worker exclusivity could compress margins.
Investors should also watch the US $6.55 convertible strike. While helpful as a floor, large‑scale conversions would lift the share count if the board doesn’t keep shrinking it.
In other words, the buyback has to remain active for the equity math to work in shareholders’ favor.
Can Grab Stock Double?
No, a double is not inevitable but with EBITDA compounding north of 40 % and a valuation still below Uber’s on forward metrics, the odds have tilted sharply in the bulls’ favor.
Grab spent the first half‑decade of its public life shaking the “cash‑burner” label. It now enjoys positive earnings, surging cash flow, a digital bank that is scaling faster than investors realize, and a balance sheet stacked with US $7‑plus billion.
A convertible note with a 40 % premium strike price suggests sophisticated investors see at least US $6.55 as fair value, ongoing execution on margins and fintech could do the rest.
For investors willing to stomach Southeast Asian volatility, US $10 a share by 2027 is no longer a fantasy, it’s the upper bound of a realistic base‑case trajectory.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.