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Sat, Mar 29, 2025, 8:02 AM 5 min read
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Southeast Asia’s digital economy is booming, and Grab Holdings (GRAB) has quietly positioned itself as a top investment for those seeking non-U.S. exposure in their portfolios. Covering mobility, deliveries, and financial services, the Singapore-based super app is gradually crawling toward profitability while boasting a cash reserve that provides a significant margin of safety and M&A opportunities.
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GRAB sports nimble financials as part of an astute broader market strategy, which has not yet been noticed by a wider audience. Moreover, the stock remains deeply undervalued due to an “Asia discount” that may translate to substantial gains despite shares already surging 53% over the past year. I’m leaning bullish on this Southeast Asian tech gem despite macro and political headwinds.
No one can argue against the fact that Grab has come a long way. From an up-and-coming ride-hailing player, it has steadily grown into an irreplaceable ecosystem for over 680 million people across eight Southeast Asian nations. In its latest report, the company celebrated a 17% revenue increase to $764 million and an $11 million profit, marking a pivotal shift from its cash-burning days.
Full-year free cash flow reached $136 million, a monumental improvement from a negative $234 million last year, with the company now starting to stack on the balance sheet and creating meaningful shareholder value.
Looking deeper into the financials, Grab’s balance sheet is stellar. With virtually no debt, $6 billion in cash (about a third of its current market cap), a clear path to positive EPS in 2025, and free cash flow in the green, GRAB’s bustling net position is set to grow. In fact, we should see free cash flow surging as its margins expand with scale. Revenue is projected at ~$3.4 billion for 2025, implying a growth of ~20% and setting up prospects of a robust operating and free cash flow margin expansion.
The fascinating aspect of Grab’s bullish investment case is that the stock trades with an “Asia discount.” Historically, Western investors often undervalue Asian tech stocks (and GRAB is trading on the Nasdaq), tend to be incredibly cautious about regulatory risks or competition and assign notably lower multiples than their American peers.
