Sea Ltd stock price target raised to $150 at Benchmark

On Wednesday, Benchmark analysts adjusted their outlook on Sea Ltd (NYSE:SE), increasing the price target to $150 from the previous $130, while sustaining a Buy rating on the company’s shares. The adjustment comes after Sea Ltd demonstrated a robust performance in the fourth quarter of 2024, surpassing expectations in all business segments in terms of revenue and profitability. The company’s stock, currently trading near its 52-week high with a remarkable 137% return over the past year, has shown strong momentum. According to InvestingPro data, Sea Ltd maintains a healthy financial position with more cash than debt on its balance sheet.

Analysts highlighted the company’s strong finish to the year, with indications of continued momentum into 2025. Sea Ltd has provided guidance that suggests its ecommerce Gross Merchandise Value (GMV) will grow by 20% year-over-year, which is higher than the market’s expectation of 17%. This is coupled with a forecast for improved profitability in the upcoming fiscal year, supported by the company’s impressive revenue growth of 29% in the last twelve months.

The gaming division, Garena, is projected to experience double-digit growth in both bookings and user numbers, despite a high comparison base from the previous year. Moreover, the company’s digital financial services arm, SeaMoney, is expected to see its loan book growth significantly surpass the GMV growth. The company’s strong financial health is reflected in its current ratio of 1.49, indicating sufficient liquidity to meet short-term obligations.

Benchmark analysts have revised their fiscal year 2025 estimates upward in response to these positive developments and the company’s guidance. The new price target of $150 reflects a more balanced and sustainable growth outlook for Sea Ltd for fiscal year 2025 and beyond. With analyst targets ranging from $100 to $180, InvestingPro subscribers can access 15+ additional exclusive tips and comprehensive financial analysis for Sea Ltd, along with detailed valuation metrics and growth projections.

Analysts further commented on the company’s strong position in the global ecommerce market, citing its dominant market share and compelling value proposition in underpenetrated markets. They continue to endorse Sea Ltd as a fundamental holding for investors focused on emerging markets, underpinned by the company’s promising growth trajectory and strategic market positioning. The company’s robust financial performance is evidenced by its gross profit margin of 43% and strong revenue CAGR of 51% over the past five years.

In other recent news, Sea Ltd reported a 37% year-over-year increase in revenue for the fourth quarter of 2024, reaching $5 billion, despite missing earnings per share expectations. The company’s full-year revenue for 2024 was $16.8 billion, reflecting strong growth in its e-commerce and digital entertainment segments. Shopee, Sea Ltd’s e-commerce platform, surpassed $100 billion in gross merchandise value for the first time, contributing significantly to the company’s revenue growth. Analysts have responded positively to these developments, with TD Cowen raising Sea Ltd’s price target to $120, Bernstein increasing it to $145, and Jefferies setting a new target of $157, each maintaining their respective ratings on the stock.

Analysts at Bernstein highlighted Sea Ltd’s strong performance in e-commerce and its fintech segment, while Jefferies noted the company’s robust results and competitive pricing strategy. Sea Ltd’s digital financial services also showed significant growth, with its loan book expanding to $5 billion. Despite challenges in its digital entertainment arm, Garena, Sea Ltd remains optimistic about future growth, projecting a 20% increase in Shopee’s GMV and double-digit growth in gaming for 2025. These developments have led to a cautious optimism among analysts, with expectations for continued strong performance in the coming years.

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