DBS Group Research on Friday (May 20) slashed its target price on Grab Holdings to US$2.93 from US$5.60 but reiterated its “hold” call on the stock.

The new target price represents a potential downside of 7.6 per cent from the counter’s Thursday after hours closing price of US$3.17. Grab was up 1 per cent or US$0.03 higher at the time.

The research team had switched to using reported revenue metrics from adjusted revenue metrics as the New York-listed digital services platform does not disclose adjusted revenue separately. As such, DBS revised its valuation metrics to Grab’s 12-month forward enterprise value being 2.8 times revenue, in line with global peers like Uber and DoorDash.

“We have applied the higher multiple of 2.8 times as Grab dominates in both food delivery and mobility segments across South-east Asia and offers superior revenue growth,” said DBS analyst Sachin Mittal.

However, both Uber and DoorDash generate positive adjusted Ebitda (earnings before interest, taxes, depreciation, and amortisation) while Grab may take at least 24-months to reach positive adjusted Ebitda, Mittal added.

Grab on Thursday announced that it narrowed losses for the first quarter ended Mar 31, reporting a loss of US$435 million from US$666 million a year prior.

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Revenue grew 6 per cent to US$228 million from US$216 million on the back of growth in its food and grocery business segment with the Jaya Grocer acquisition, as well as a rebound in the mobility segment.

Grab’s total adjusted Ebitda loss of US$287 million was higher than DBS’s expectations of US$200 million. The research team expects adjusted Ebitda losses to continue for at least another 2 years.

Shares of Grab closed US$0.61 or 24.1 per cent higher at US$3.14 on Thursday in New York.