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On Tuesday, Bernstein analysts maintained their positive stance on Sea Ltd (NYSE:SE) shares, reiterating an Outperform rating alongside a consistent price target of $130.00. The stock, currently trading at $125.28, has shown remarkable strength with a 188% return over the past year. According to InvestingPro analysis, Sea Ltd is currently trading near its Fair Value, with 18 valuable insights available to subscribers. Sea Ltd, in collaboration with TikTok Shop, has been strategically using discounting to fuel growth, a move that Bernstein analysts believe is paying off despite the high level of discounts being offered.
The analysts noted that while the aggressive discounting strategy might slow down the scale of EBITDA, it is expected to bolster the quarterly strengthening of EBITDA for Sea Ltd, which currently stands at $750.1 million. The report highlighted that this approach is underpinned by a redeployment of commissions to fund growth initiatives. The company’s strong financial position is reflected in its "GOOD" overall health score from InvestingPro, with revenue growing at 20% year-over-year to $15.5 billion. Additionally, factors such as increased spending efficiency and a shift toward Shopee Mall and higher margin categories are seen as key supports for the company’s market positioning.
Shopee, Sea Ltd’s e-commerce platform, is taking on competitors directly, which is anticipated to sustain its market share. The Bernstein analysts expect Shopee to remain profitable within the e-commerce segment, with an EBITDA that strengthens each quarter. The report suggests that while there may be a debate regarding Sea Ltd’s position by the end of CY25 relative to consensus, the outcome will largely depend on spending efficiency and product mix.
The analysts’ survey indicates that Shopee is likely to continue with only modest strategic adjustments, remaining selectively aggressive in markets where it seeks to expand its footprint. This active strategy, according to Bernstein, should provide a level of assurance to investors. With the next earnings report due on March 4th and analysts forecasting strong EPS growth, investors seeking deeper insights can access comprehensive analysis and valuation metrics through InvestingPro’s detailed research reports. The affirmation of the Outperform rating on Sea Ltd reflects the analysts’ confidence in the company’s ability to navigate the competitive e-commerce landscape successfully.
In other recent news, Sea Ltd continues to draw attention from various analyst firms. BofA Securities maintains a Buy rating on Sea Ltd with a steady price target of $134, emphasizing the significant contribution of the game Free Fire to Garena’s EBITDA, and the company’s efforts to diversify its gaming portfolio. Bernstein analysts also maintain their Outperform rating on Sea Ltd with a consistent price target of $130, acknowledging the company’s strategic focus on market positioning, growth, and cash flow.
On the other hand, Morgan Stanley (NYSE:MS) reaffirmed its confidence in Sea Ltd, maintaining an Overweight rating and a price target of $140, highlighting the robust performance of Sea’s digital entertainment segment and consistent growth in its e-commerce platform, Shopee. However, Phillip Securities downgraded Sea Ltd from Neutral to Reduce, despite an increase in the price target to $100 from the previous $80, suggesting limited upside potential in the share price relative to the market expectations.
In other recent developments, Serina Therapeutics, a pharmaceutical company, has announced the expansion of its Equity Incentive Plan following approval from its shareholders. The approved changes include an increase in the number of shares reserved for issuance under the plan and an automatic annual increase of 5% of the outstanding common stock. This move aligns the interests of its employees with those of its shareholders.
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