Grab Earnings: Revenue Miss Due to Currency Translation, Not Operational Issues; Concerns Overblown

We maintain our fair value estimate for Grab at $4.60 per share despite reporting second-quarter 2024 revenue of $664 million that fell short of our estimate by 1.5%. The stock dropped sharply given the slight miss, but we believe this was a vast overreaction and concerns are overblown. The revenue miss was due to foreign exchange translation resulting from weakened Asian currencies against the US dollar and not because of any structural changes or operational issues. Without the translation and on a constant-currency basis, revenue rose 23% year on year, which would've beaten the consensus estimate by 4%. We believe that the weakening currency is temporary, and investors are overlooking that gross transaction value, or GTV, would have increased 18% year on year under constant currency. Given the robust growth, we do not believe there are any operational issues with Grab and the firm should continue to expand scale as it added 2.4 million users to its platform sequentially and 6 million year on year to 40.9 million total users. The user growth reflects continued momentum for the platform.