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Investing.com - Bernstein has reduced its price target on Sea Ltd (NYSE:SE), a $92.8 billion market cap company, to $185.00 from $210.00 while maintaining an Outperform rating on the stock. According to InvestingPro data, the stock currently trades at $155.96 and appears slightly undervalued based on Fair Value analysis.
The adjustment comes as Bernstein analyst Venugopal Garre noted Sea Ltd’s recent memo outlined a "compelling long-term vision anchored by a strong dose of AI optimism" but highlighted near-term tension between growth and margins.
Bernstein acknowledged that Sea outperformed across metrics in the first half of the year, which prompted upward estimate revisions for both near and long-term forecasts based on strong delivery rather than management guidance.
The firm expressed doubt that the "flawless first half will be repeated" as Sea reinvests aggressively in two key areas: e-commerce reinvestment in faster delivery and logistics, and fintech expansion with new product launches and a shifting loan book as its Malaysia and Singapore digital banks gain traction.
Bernstein pointed to past cycles showing that "market activation and share defense are essential for sustaining free cash flows," suggesting these reinvestments are strategically necessary despite their near-term impact on margins.
In other recent news, Sea Ltd. has garnered attention with several developments. JPMorgan has maintained its Overweight rating on Sea Ltd., raising its price target to $230.00, reflecting optimism about the growth potential of Sea’s e-commerce platform, Shopee. Meanwhile, Bernstein SocGen Group also increased its price target for Sea Ltd. to $210.00 from $180.00, highlighting the company’s impressive recovery over the past 18 months. Despite these positive outlooks, Sea Ltd. shares experienced a notable decline, with a 9.6% drop attributed to market adjustments concerning the company’s valuation, according to Philip Securities analyst Helena Wang.
The company’s stock also fell by 10%, amid concerns over e-commerce margins and potential market expansion by Shopee. JPMorgan reiterated its confidence in Sea Ltd. by maintaining an Overweight rating and a $208.00 price target, emphasizing rising e-commerce take rates in ASEAN markets. Shopee, along with TikTok Shop and Lazada, has increased take rates in several ASEAN countries, with TikTok Shop leading in many areas. These developments underscore the dynamic nature of Sea Ltd.’s market environment and the varying perspectives of analysts on its future growth.
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