Grab Holdings (GRAB.US), the Southeast Asian ride-hailing and food delivery giant, released its third-quarter 2026 results after the U.S. market closed on Monday, November 2. Citi said in a research note published afterward that Grab's third-quarter results came in stronger than expected, with revenue and adjusted EBITDA beating its forecasts, while the company's upwardly revised full-year 2026 guidance also exceeded its expectations. Citi rates Grab a "Buy" with a price target of $5.50, implying more than 92% upside from the stock's Monday closing price of $2.86.

Earnings Review

The results showed Grab's third-quarter revenue rose 27% year over year (up 30% at constant currency) to $1.11 billion, beating the market consensus of $1.08 billion and Citi's estimate of $1.07 billion. On-demand services gross merchandise value (GMV), which includes deliveries and mobility, grew 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) grew 20% year over year to 57.2 million (above Citi's forecast of 54.9 million), translating to GMV per monthly active transacting user on on-demand services of $135, up 2% year over year.

On profitability, adjusted EBITDA reached $237 million, above Citi's estimate of $194 million and the market consensus of $193 million. However, profit for the period was $18 million, below the market consensus 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, implying year-over-year growth of 23% to 25%. By comparison, Citi had estimated $4.15 billion and the market consensus was $4.16 billion. Full-year adjusted EBITDA guidance was raised to $790 million to $800 million from $720 million to $740 million, implying year-over-year growth of 58% to 60%. By comparison, both Citi and the market consensus had expected $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, equal to 12.5% of GMV, compared with revenue of $465 million in the third quarter of 2025, also 12.5% of GMV. By comparison, Citi and the market consensus had expected $538 million and $550 million, respectively. Adjusted EBITDA was $123 million, or 2.7% of GMV, up from 2.1% in the third quarter of 2025. By comparison, Citi and the market consensus had expected $107 million and $102 million, respectively.

Mobility GMV rose 14% year over year (up 17% at constant currency) to $2.34 billion (compared with Citi's estimate of $2.36 billion). IFRS revenue was $349 million, equal to 15% of GMV, up 10% year over year (up 12% at constant currency), versus 15.5% of GMV in the third quarter of 2025. By comparison, Citi and the market consensus had expected $355 million and $353 million, respectively. Adjusted EBITDA was $207 million, or 8.9% of GMV, flat versus 8.9% in the third quarter of 2025. By comparison, both Citi and the market consensus had expected $203 million.

In financial services, total loan volume rose 200% year over year to $2.71 billion, compared with Citi's forecast of $2.6 billion, up 188%. IFRS revenue was $201 million, up 124% year over year and up 132% at constant currency. By comparison, Citi and the market consensus had expected $179 million and $173 million, respectively. Adjusted EBITDA was positive $12 million, compared with negative $28 million in the third quarter of 2025. By comparison, Citi and the market consensus had expected negative $3 million and negative $2 million, respectively. Other revenue was $1 million, and adjusted EBITDA for that business segment was negative $4 million.

Citi's View

Citi believes Grab's third-quarter results beat expectations, with strong growth in monthly transacting users and EBITDA profitability, as adjusted EBITDA came in 22% and 23% above the bank's and the market consensus estimates, respectively. In addition, the company's upward revision to full-year guidance, especially the sharp increase in its EBITDA guidance, surprised the bank, given that the company had previously faced multiple headwinds including foreign exchange volatility and weakness in local economies. The deliveries business continued to post strong growth, with GMV up 21% year over year and EBITDA margin expanding to 2.7%, clearly exceeding expectations. Loan growth also beat expectations. However, mobility performance was broadly in line with expectations, taking into account fuel costs and driver incentives.

Citi's sum-of-the-parts (SOTP) valuation model yields a price target of $5.50 for Grab. The valuation breaks down as follows: 1) On-demand services: $3.50 per share. Based on an estimated 2027 adjusted EBITDA of $1.46 billion for the combined deliveries and mobility on-demand services business and applying a 10x valuation multiple, this corresponds to a total value of $14.6 billion, or $3.50 per share. The 10x target valuation multiple set by Citi represents a 30% premium to the average valuation of Asian and global peers; these peers have seen valuation multiples cut by more than the valuation adjustment in Grab's share price. 2) Financial services: $1.14 per share. Based on a 5x valuation multiple applied to estimated 2027 IFRS revenue of $954 million, this corresponds to a total value of $4.77 billion, or $1.14 per share. 3) Cash: $0.90 per share. Based on the cash balance as of the second quarter of 2026, with a 30% discount applied.