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On Thursday, Loop Capital Markets increased their price target on Sea Ltd (NYSE:SE) shares, lifting it from $165 to $190, while maintaining a Buy rating on the stock. The revision comes as the analyst firm anticipates stronger performance in the company’s ecommerce and gaming segments. With a current market capitalization of nearly $98 billion and a remarkable 142% return over the past year, Sea Ltd has shown impressive momentum. According to InvestingPro data, the stock is trading near its 52-week high of $169.28, with multiple analysts recently revising their earnings estimates upward.
Sea Ltd’s ecommerce platform, Shopee, has shown significant improvement, with its EBITDA margin rising to 0.9% of GMV, up from negative figures in just three quarters. This progress has led Loop Capital to believe that the management’s goal of 2% to 3% GMV margin may be understated. Analysts at Loop Capital suggest that Shopee’s long-term earnings potential could exceed 6% of GMV, depending on the growth of retail media, shopper data, and AI-driven advertising technology for Sea Ltd. The company’s overall revenue has grown by 30% in the last twelve months, with a gross profit margin of 44%. For deeper insights into Sea Ltd’s financial health and growth prospects, check out the comprehensive Pro Research Report available on InvestingPro.
Additionally, Sea Ltd’s gaming arm, Garena, has outperformed expectations thanks to successful intellectual property collaborations. The company’s fintech business is also gaining momentum, presenting what Loop Capital describes as an "open-ended opportunity" for growth.
The revised price target of $190 reflects Loop Capital’s increased estimates based on these positive developments within Sea Ltd’s diverse business operations. The firm’s analysis points to a robust profit ramp in ecommerce and a promising outlook for the gaming division, contributing to the optimistic valuation of Sea Ltd’s stock.
In other recent news, Sea Ltd has seen a flurry of analyst activity, highlighting its performance across various business segments. Barclays (LON:BARC) raised Sea Ltd’s price target to $200, maintaining an Overweight rating, following a strong first-quarter performance by Shopee, which reported a Gross Merchandise Value growth of 21.5% year-over-year. The digital commerce arm’s EBITDA margin was significantly above expectations, indicating potential for substantial profit growth by 2025. Similarly, Benchmark increased its price target to $180, reaffirming a Buy rating, citing robust growth in Sea Ltd’s e-commerce and gaming divisions, despite some revenue projections being missed due to deferred gaming revenue.
Bernstein SocGen also adjusted its price target to $170 with an Outperform rating, acknowledging Sea Ltd’s notable operational scale-up and strong returns profile. TD Cowen raised its target to $140, driven by significant growth in Garena’s bookings, which surged 73% year-over-year, and a strong performance in Sea’s financial technology segment, Monee. Meanwhile, Phillip Securities downgraded Sea Ltd from Accumulate to Neutral, despite increasing the price target to $160, due to the stock’s significant rally and limited short-term upside.
The fintech arm, Monee, has shown rapid expansion, with a 75% year-over-year growth in its loan book, as noted by Benchmark. Analysts have expressed confidence in Sea Ltd’s long-term growth, with Barclays highlighting Monee’s potential to become a mainstream banking platform in the ASEAN region. Overall, these developments reflect a mixed but generally optimistic outlook from analysts, focusing on Sea Ltd’s strategic positioning and operational capabilities across its diverse business segments.
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