Uber Technologies UBER and Grab GRAB both provide ride-hailing services. The companies have revolutionized the transportation industry with their innovative business models centered on ride-sharing.
However, the companies operate in different regions and have distinct approaches. While Uber operates globally, Grab is a leading provider of deliveries, mobility and digital financial services sectors in multiple cities across eight countries in Southeast Asia — Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Even though Uber’s primary business is ride-sharing, it has diversified into food delivery and freight over time.
Given this difference in approaches and geographical focus of the two companies, let’s examine closely to find out which one currently holds the edge, and more importantly, which might be the smarter investment now.
The Case for Uber
Uber is based in San Francisco, CA. Uber’s ridesharing and delivery platforms are growing in popularity. This is generating strong demand, which, along with the latest growth initiatives and continued cost discipline, is driving the company’s results.
In its recently released first-quarter 2025 results, Uber continued its streak of beating earnings expectations, showing resilience despite tough conditions.
Uber Price, Consensus and EPS Surprise
Uber Technologies, Inc. Price, Consensus and EPS Surprise
In the June quarter, gross bookings are anticipated to be in the $45.75 billion - $47.25 billion range, indicating 16-20% growth on a constant currency basis from second-quarter 2024 actuals. The guidance includes an estimated 1.5 percentage point impact of currency headwind (including a roughly 3 percentage point currency headwind to Mobility).
Earnings Estimates for Uber
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Uber aims to gain a stronghold in the highly promising robotaxi market through strategic partnerships. By adopting this approach, Uber has been able to avoid the massive R&D costs associated with developing autonomous systems independently. Moreover, Uber has engaged in numerous acquisitions, geographic and product diversifications, and innovations. Its endeavors to expand into international markets are commendable and provide it with the benefits of geographical diversification.
Another area of confidence is Uber’s buyback strategy. In 2024, Uber generated a record $6.9 billion in free cash flow, with an adjusted EBITDA of $6.5 billion. Uber’s announcement to start an accelerated $1.5 billion stock buyback program highlights not only its shareholder-friendly strategy but also signals confidence in its ongoing business strategy. The $1.5 billion plan is part of the company's $7 billion buyback program announced last year.
In 2018, Uber, which went public in 2019, sold its business in Southeast Asia to Grab. Uber has a significant stake in Grab.
The Case for Grab
Grab's ability to adapt to local conditions is a key contributor to its success in Southeast Asia. Moreover, Grab’s evolution from a taxi-hailing app into an "everyday everything app" offering various services, including food delivery, e-scooter rentals and digital payments, is commendable and highlights its desire to expand.
Grab is benefiting from strong growth in its On-Demand Gross Merchandise Value (“GMV”), expanding fintech offerings, and increasing user engagement across its platform. On-demand GMV refers to the sum of GMV of the mobility and deliveries segments. In the first quarter of 2025, On-Demand GMV increased 16% year over year. Grab expects 2025 revenues between $3.33 billion and $3.40 billion, indicating 19-22% year-over-year growth.
Grab Price, Consensus and EPS Surprise
Grab Holdings Limited Price, Consensus and EPS Surprise
Grab is strengthening its position across Southeast Asia by partnering with Amazon’s AMZN cloud computing platform — Amazon Web Services (“AWS”) — to drive growth in mobility, deliveries and financial services.
In December 2024, Grab selected AWS as its preferred cloud provider to accelerate growth across its mobility, deliveries, and financial services verticals, including its digital banks. Grab has enhanced operational efficiency, reduced infrastructure costs and launched innovative services by utilizing AWS’ scalable, secure and cost-efficient cloud solutions.
Earnings Estimates for Grab
Zacks Investment Research
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Grab Appears to Be More Pricey Than Uber
Uber is trading at a forward sales multiple of 3.58, above its median of 2.54 over the last three years. Uber has a Value Score of D. Meanwhile, Grab has a Value Score of F, with its forward sales multiple at 5.78, above its 3-year median of 4.85.
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Conclusion
Uber’s expensive valuation (compared to its 3-year median) seems to suggest that investors are willing to pay a premium for this dominant player in the ride-hailing industry. The company’s diversification efforts and shareholder-friendly approach attest to its financial bliss. Uber’s large size (market capitalization of $191.95 billion) positions it well to overcome uncertain times, such as the current one.
Grab, on the other hand, has a much narrower geographical focus, making it highly susceptible to economic downturns, such as the current scenario. The economic uncertainty in key Southeast Asia markets, driven by factors like inflation, changing consumer behavior, and supply-chain disruptions, is hurting Grab. Moreover, Grab faces intense competition in its deliveries segment. The much smaller Grab, with a market capitalization of $20.5 billion, is not as shareholder-friendly, as its larger rival.
On the basis of our analysis, Uber seems a better pick than Grab, despite both carrying a Zacks Rank #3 (Hold) currently.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
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