Grab Holdings (NASDAQ:GRAB) saw its shares slip about 33% from their 2026 highs, a decline that has made the company's share repurchase program significantly more cost-effective. The stock edged up 1.1% on Friday to close at $3.34, but that minor gain did little to change the broader picture. The current price is just 4.9% above its 2026 low of $3.18 and remains nearly 50% below the peak of $6.62.
The steep drop has lowered the effective cost of Grab's buyback plan. Based on Friday's closing price, the company's up-to-$400 million authorization could repurchase roughly 120 million shares, representing approximately 3.0% of the roughly 3.97 billion shares outstanding. The final number will depend on average prices, discounts, and contingent-forward provisions, but the current valuation makes the buyback more attractive mathematically.
Investors are now looking ahead to Grab's second-quarter earnings, scheduled for release after the market close on August 3. Consensus estimates call for revenue of $990.4 million, representing 20.9% growth from the same period last year. Adjusted EBITDA is expected to come in at $156.6 million, an increase of 43.7%, with the margin implied at 15.8%.
The margin figure is a key focus. While Q1 delivered an EBITDA margin of 16.2%, the Q2 consensus sits just below that level at 15.8%. The challenge for Grab is maintaining margins rather than driving significant further growth. In Q1, revenue climbed 24% to $955 million, and adjusted EBITDA grew 46% to $154 million, with margins expanding by 250 basis points year-over-year.
Incentives and Indonesia Commission Cap
One area of concern is the rising cost of incentives. Combined partner and consumer incentives reached $650 million in Q1, up nearly 30% from the prior year. That represented 10.5% of on-demand GMV, an increase of 46 basis points. The pace of incentive growth outpaced on-demand GMV growth, a trend that could pressure margins if it continues.
Indonesia presents a specific test of balance. Starting July 1, the cap on commissions taken from two-wheel drivers was reduced to 8% from 20%. Since Q2 ended in June, the full impact of this regulatory change will be felt in the third quarter.
Financial Services Growth and Risks
Grab's financial services segment is showing faster expansion but carries increased risk. The gross loan portfolio jumped 130% to $1.44 billion in Q1. Segment revenue climbed 43%, though adjusted EBITDA remained negative at $17 million. The rapid loan growth, combined with elevated incentives and the Indonesia commission ceiling, could reduce overall returns.
As of March, Grab reported company-defined net cash liquidity of $5.0 billion. With a market capitalization of $13.18 billion as of Friday, that implies a proxy enterprise value of $8.18 billion, or about 11.5 times the midpoint of its projected 2026 adjusted EBITDA. However, that valuation uses March cash and non-IFRS EBITDA, both of which could shift significantly after the August results.
During the launch of the March buyback, Chief Financial Officer Peter Oey described the drop in share price as "a clear opportunity to enhance shareholder value." Grab initially received roughly 54.9 million shares from an accelerated agreement, with the final settlement determined by trading prices. The buyback may help support share supply, but it does not address the investment thesis. Grab shares have declined approximately 6.6% since last Friday and are down roughly one-third for the year.
Friday's modest rise provides no clear direction. The August report needs to confirm that Q1's operating leverage remains intact. If margins hold and revenue meets expectations, the stock could find a floor. But if incentives continue to rise and the Indonesia commission cap bites, the pressure on shares may persist.
