What happened
Asian food delivery specialist Grab Holdings(NASDAQ: GRAB) delivered quite the filling and tasty meal for its investors earlier this week. The company published its second-quarter results, which boasted a revenue growth number that was well in the double digits. It also raised profitability guidance and moved forward its expected timing for reaching breakeven. That inspired a clutch of analysts to raise their price targets on the shares.
Consequently, according to data compiled by S&P Global Market Intelligence, the stock's price was rising by slightly over 15% week to date as of mid-afternoon trading Friday.
So what
Grab's second quarter featured robust (77%) year-over-year revenue growth thanks to delivery sales that more than doubled over that stretch of time. The subscriber count saw a nice increase too, advancing at a 43% pace. There was also good news on the guidance front; the company substantially upped its projection for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
On the back of that encouraging performance, several analysts wasted little time in changing their view on Grab for the better. Leading this charge was Barclays, whose pundit Jiong Shao upgraded his recommendation the company's shares to overweight (buy, in other words) from the previous equalweight (neutral). While doing so, he also cranked his price target 50% higher to $4.50 per share.
Shao's change was based on a number of positive developments for Grub during the quarter, including success with its advertising business and a push into higher-margin revenue offerings.
Now what
Several other prognosticators upped their Grub price targets without changing their recommendations. Among this crowd was Bank of America Securities' Sachin Salgaonkar with a lift to $4.70 per share from the preceding $4.50; he kept his buy recommendation intact. The more bullish Mark Mahaney at Evercore ISI pushed his level $2 higher, to $7 per share, as he maintained his outperform (buy) evaluation.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America and Grab. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.
