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On Wednesday, Benchmark analyst Fawne Jiang increased the price target on Sea Ltd (NYSE:SE) shares to $180 from $150, while reaffirming a Buy rating. Jiang’s optimism is rooted in the company’s strong performance across its various segments, despite missing revenue projections for the headline figures due to deferred gaming revenue. The stock has shown remarkable momentum, currently trading at $159.75, representing a 132.61% return over the past year. According to InvestingPro data, the company maintains strong financial health with a "GREAT" overall score.
Sea Ltd’s latest financial quarter demonstrated robust, broad-based growth, which has reinforced confidence in the company’s fundamental strengths. The e-commerce sector exceeded expectations with an adjusted EBITDA of 0.9% of GMV, attributed to substantial GMV growth. The gaming division showcased exceptional performance, particularly due to the success of its game Free Fire. Additionally, the fintech arm of Sea Ltd expanded rapidly, with a 75% year-over-year growth in its loan book and maintained controlled risk levels. With revenue growth of 30.31% and a market capitalization of $91.25 billion, Sea Ltd has established itself as a prominent player in the Entertainment industry. InvestingPro subscribers can access 18 additional key insights about Sea Ltd’s performance and valuation metrics.
The analyst noted that while certain seasonal factors and one-off events, such as an early Ramadan and a strong gaming expansion pack, contributed to the results, the visibility into Sea Ltd’s profitability growth for the fiscal years 2025 and 2026 has improved. This has led to an increase in estimates and the price target adjustment. The company’s strong financial position is evident in its healthy current ratio of 1.51 and robust cash flows that sufficiently cover interest payments.
Despite concerns over macroeconomic issues like trade tensions, Jiang believes that Sea Ltd’s competitive pricing, value positioning, and the relatively low penetration of e-commerce in its markets position the company to continue capturing consumer attention and demonstrate resilience.
The analyst concluded by expressing a bullish stance on the company’s prospects, particularly in the gaming segment, which is expected to benefit from deferred revenue tailwinds and a strong pipeline. The fintech sector’s momentum was also highlighted as a reason for maintaining the Buy rating. Jiang recommends Sea Ltd as a core holding for investors focused on emerging markets.
In other recent news, Sea Ltd has reported impressive first-quarter results, drawing attention from multiple analysts. Barclays (LON:BARC) raised Sea Ltd’s price target to $200, citing the strong performance of Shopee, which achieved a Gross Merchandise Value (GMV) growth of 21.5% year-over-year and an EBITDA margin that exceeded expectations. JPMorgan also upgraded Sea Ltd to Overweight, increasing the price target to $190, highlighting the company’s strong e-commerce growth and reduced logistics costs in Asia. The firm’s fintech segment, Monee, also showed promise with a robust 16% quarter-over-quarter growth in its gross loan book.
TD Cowen increased its price target for Sea Ltd to $140, following strong first-quarter results driven by Garena’s 73% year-over-year bookings growth. Bernstein SocGen raised its price target to $170, maintaining an Outperform rating due to Sea Ltd’s significant operational growth and strategic positioning in the ASEAN region. Analysts noted Sea Ltd’s ability to leverage its super app status and build new cash flow streams.
Garena, Sea Ltd’s digital entertainment division, exceeded expectations with over 50% year-over-year bookings growth. The success of Shopee and Monee, along with the gaming division’s performance, has led analysts to revise their long-term forecasts for Sea Ltd, indicating confidence in the company’s growth trajectory. These developments reflect Sea Ltd’s strategic advantages across its diversified business segments.
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