Bernstein sees TI’s likely price hike benefiting Infineon, Renesas stock
On Wednesday, TD Cowen showed confidence in Sea Ltd (NYSE:SE) by increasing the company’s price target from $110.00 to $120.00, while keeping a Hold rating on the shares. The stock has shown remarkable momentum, delivering a 137% return over the past year and currently trading near its 52-week high of $139.18. The adjustment follows Sea Ltd’s fourth quarter earnings report, which revealed revenues and EBITDA surpassing consensus estimates, primarily due to the robust performance of its Shopee e-commerce platform. According to InvestingPro data, the company maintains a GOOD financial health score with strong growth metrics.
Shopee’s growth was marked by a strong Gross Merchandise Value (GMV) and a rise in advertising revenue, which led to a 6% revenue beat against consensus. With total revenue reaching $16.8 billion and showing robust growth of 28.75% year-over-year, the company’s performance has been impressive. The management of Sea Ltd anticipates that Shopee will continue to grow, projecting approximately 20% year-over-year growth for the year 2025. This is more optimistic than TD Cowen’s own estimate of 16.6% growth for the same period.
However, Garena, Sea Ltd’s digital entertainment arm, did not perform as well, with revenue falling 4% short of consensus estimates. The shortfall was attributed to lower than expected user numbers and average revenue per paying user (ARPPU). Despite this, the company’s management forecasts a 10% or more increase in user numbers and bookings for 2025.
The overall EBITDA for the fourth quarter stood at $591 million, which was 1% higher than consensus estimates. In response to these results, TD Cowen revised their estimates upward, leading to the new $120 price target for Sea Ltd while maintaining a Hold rating on the stock. The firm’s analysis reflects a cautious optimism about the company’s future performance, particularly in its e-commerce segment. For deeper insights into Sea Ltd’s valuation and growth prospects, including 15 additional ProTips and comprehensive financial analysis, visit InvestingPro to access the detailed Pro Research Report.
In other recent news, Sea Ltd reported a significant increase in revenue for the fourth quarter of 2024, with a 37% year-over-year rise to $5 billion, surpassing revenue forecasts. The company also reported a full-year net income of $448 million, up from $163 million in 2023, reflecting strong growth in its e-commerce and digital entertainment segments. Shopee, Sea Ltd’s e-commerce platform, achieved a gross merchandise value (GMV) exceeding $100 billion for the first time. Analysts at Bernstein SocGen Group and Jefferies have shown confidence in Sea Ltd’s future performance, with Bernstein raising its price target to $145 and Jefferies increasing it to $157, both maintaining positive ratings. The analysts highlighted Sea Ltd’s robust e-commerce strategy and significant growth in the fintech vertical, with a loan book reaching $5 billion. Sea Ltd’s digital financial services and gaming segments are also expected to continue growing, with the company forecasting over 20% growth in GMV for 2025. Additionally, the company’s logistics service, SPX, has achieved cost efficiencies, and its gaming segment, led by Free Fire, continues to show solid growth.
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