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On Monday, BofA Securities sustained their positive stance on Sea Ltd (NYSE:SE) shares, maintaining a Buy rating with a steady price target of $134.00. Trading near its 52-week high of $126.12, Sea Ltd has demonstrated remarkable momentum with a 189.84% return over the past year. The firm’s analysis highlighted the significant contribution of the game Free Fire to Garena’s EBITDA, which is estimated to be between 80-85% of the gaming division’s earnings before interest, taxes, depreciation, and amortization.
BofA Securities acknowledged Sea Ltd’s efforts to diversify its gaming portfolio beyond the success of Free Fire. With revenue growing at 20.06% and a strong financial health score according to InvestingPro, this strategic move marks a shift from the company’s previous approach of using gaming business cash flows to support its e-commerce operations and expansion efforts in Brazil.
The analyst noted the financial progress of Sea Ltd’s three main business segments. With the e-commerce, gaming, and Brazil operations all reaching EBITDA break-even, the company is now able to reinvest cash flows from Garena to further drive growth in its gaming sector. According to InvestingPro, Sea Ltd maintains strong liquidity with a current ratio of 1.62 and holds more cash than debt on its balance sheet. Subscribers can access 16 additional ProTips and a comprehensive analysis through the Pro Research Report.
This reinvestment strategy is designed to enhance the company’s gaming offerings and reduce the reliance on a single title for the majority of its gaming revenue. The analyst’s commentary underscores a pivotal moment for Sea Ltd as it capitalizes on its financial stability to bolster its position in the gaming industry.
Sea Ltd’s stock price target remains unchanged at $134.00, reflecting the analyst’s confidence in the company’s potential for growth and the effectiveness of its reinvestment strategy. The Buy rating by BofA Securities indicates their expectation for the stock to perform well in the market.
In other recent news, Sea Ltd reported a significant year-on-year revenue increase of 31% to $4.3 billion in its third-quarter earnings, with adjusted EBITDA rising to $521 million. This growth was observed across all three of Sea Ltd’s main business segments. Bernstein analysts maintained their Outperform rating on Sea Ltd shares, emphasizing the importance of new initiatives for providing clearer visibility on the company’s future growth potential. Meanwhile, Morgan Stanley (NYSE:MS) and Barclays (LON:BARC) both raised their price targets for Sea Ltd to $131, maintaining an Overweight rating. However, Phillip Securities downgraded Sea Ltd’s stock rating from Neutral to Reduce, despite raising the fiscal year 2024 earnings and revenue forecasts by 4% and 1% respectively.
In other recent developments, Serina Therapeutics expanded its Equity Incentive Plan, increasing the number of shares reserved for issuance under the plan by 950,000 shares. The amendment was ratified during the company’s Annual Meeting, where Balkrishan "Simba" Gill, Remy Gross, and Steven Mintz were elected as directors. The appointment of Frazier & Deeter, LLC as the company’s independent registered public accounting firm for the 2024 fiscal year was also ratified. These are the recent developments from Sea Ltd and Serina Therapeutics.
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