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On Monday, Phillip Securities adjusted its stance on Sea Ltd (NYSE:SE) shares, downgrading the rating from Accumulate to Neutral. The firm set a new price target for the company at $160, which is an increase from the previous target of $140. The stock, currently trading near its 52-week high of $165.90, has delivered an impressive 128% return over the past year. According to InvestingPro data, the company’s robust financial health is reflected in its "GREAT" overall score, with particularly strong momentum metrics.
The revision by Phillip Securities was prompted by the recent performance of Sea Ltd’s stock, which has experienced a notable rally. The firm acknowledged the company’s growth prospects, particularly in its digital financial services arm, Monee, and its digital entertainment platform, Garena. These segments are expected to continue their upward trajectory, contributing to the overall financial health of the company. With revenue growth of 30% in the last twelve months and a strong balance sheet showing more cash than debt, Sea Ltd demonstrates solid fundamentals. InvestingPro subscribers have access to 22 additional insights about Sea Ltd’s growth potential and market position.
The research firm has also revised its forecasts for Sea Ltd’s revenue and profit after tax and minority interest (PATMI) for the fiscal year 2025. Estimates were increased by 2% for revenue and 13% for PATMI, reflecting confidence in the company’s growth and cost efficiency improvements.
In addition to the adjustments in financial projections, Phillip Securities has raised its terminal growth rate assumption for Sea Ltd to 4.5%, up from 4%. This change is based on the potential for Monee to further penetrate the significant unbanked population in Southeast Asia, suggesting a strong long-term growth trajectory.
Despite the positive outlook on Sea Ltd’s business operations, the firm’s decision to raise the discounted cash flow (DCF) target price to $160 comes with an unchanged weighted average cost of capital (WACC) of 7.6%. The new price target reflects the firm’s view that, following the stock’s significant rally, there is limited room for further upside in the near term.
In other recent news, Sea Ltd has seen a series of analyst upgrades and increased price targets following its latest quarterly performance. Barclays (LON:BARC) raised the company’s price target to $200, highlighting Shopee’s 21.5% year-over-year growth in Gross Merchandise Value (GMV) and an impressive EBITDA margin. JPMorgan also upgraded Sea Ltd’s stock rating to Overweight, setting a new price target of $190, driven by Shopee’s EBITDA margin improvements and a 21% increase in GMV. Benchmark increased its price target to $180, emphasizing the company’s broad-based growth across e-commerce, gaming, and fintech segments. Analyst Fawne Jiang noted the strong performance of Sea Ltd’s game Free Fire and the fintech arm’s 75% growth in its loan book.
TD Cowen raised its price target to $140, citing Garena’s 73% year-over-year bookings growth and an overall EBITDA that exceeded estimates by 33%. Bernstein SocGen Group set a new price target of $170, maintaining an Outperform rating and noting Sea Ltd’s scale-up in operations and strategic positioning. The company’s fintech segment, Monee, showed a 67% revenue growth, further supporting the positive outlook. Analysts across these firms remain confident in Sea Ltd’s ability to maintain profitability growth, with significant attention on Shopee’s margin expansion and Garena’s sustained performance. These developments underscore Sea Ltd’s robust market positioning and growth potential across its diversified business segments.
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