$Grab Holdings (GRAB.US)$ has seen its stock surge by 35% this quarter, and analysts believe there is more room for growth. Evercore ISI International Ltd recently raised its price target for the stock to US$8 from US$7, implying a 56% upside from the current trading level. Bloomberg data indicates the company is expected to swing to a US$6.5 million operating profit this quarter, a stark improvement from a US$38 million loss in the prior three months.

The Singapore-based ride-hailing and delivery giant has achieved dominance in Southeast Asia, outperforming its rivals, including Indonesia's GoTo Group. This quarter's stock rally has made Grab the top performer globally in its sector. Analysts attribute this success to its strong market share and scale advantage, enabling it to reduce customer incentives and enhance driver income opportunities.

Maybank Securities projected continued momentum for Grab in the fourth quarter, citing growth in its core services and the expansion of its digital banking operations. "We believe secular growth, leading market share and scale will drive significant profitability for Grab over time, just as they have for Uber globally," Evercore analysts led by Mark Mahaney noted.

Grab's revenue growth has slowed significantly from its earlier triple-digit rates, reflecting a more challenging macroeconomic environment where inflation and interest rates remain elevated. However, the company's ability to generate strong results amidst these conditions continues to attract investor interest.

At least 22 analysts raised their target prices after Grab's third-quarter profit beat expectations. The stock closed at US$5.13 on Friday, with Citigroup Inc noting that structural opportunities in Southeast Asia are driving long-term investor confidence. The analyst added that Grab is less vulnerable to potential trade tariffs under a possible second Donald Trump presidency, which could further support the stock's rise.

Still, some analysts remain cautious. Morningstar Inc emphasised that margin expansion in both delivery and ride-sharing services is necessary to sustain the rally. Grab's path forward will also require continued growth in user acquisition to achieve similar levels of market penetration as Uber Technologies Inc has in the US, according to Bloomberg Intelligence.

Grab's shares are generating considerable interest among investors, with analysts maintaining a positive outlook as long as the firm delivers consistent results.

Bloomberg