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On Friday, UBS analyst Navin Killa updated the firm’s outlook on Sea Ltd (NYSE:SE), increasing the price target from $135.00 to $176.00 and retaining a Buy rating on the stock. The adjustment follows Sea’s fourth-quarter 2024 results and the company’s guidance for 2025, which surpassed both UBS’s and the consensus estimates. The analyst noted the strong performance in e-commerce and Fintech, highlighting their robust growth and improved margins. The market has responded positively, with the stock delivering a 9.33% return over the past week and trading near its 52-week high of $147.73. According to InvestingPro data, Sea Ltd has demonstrated impressive revenue growth of 28.75% over the last twelve months.
The management team at Sea Ltd expressed confidence in the company’s prospects for 2025, citing a stable competitive environment in e-commerce and significant growth opportunities in both the e-commerce and Fintech segments. Additionally, the company’s gaming revenues have continued to rise, now in the eighth year of the Free Fire franchise’s success. InvestingPro analysis shows the company maintains a strong financial position with a "GREAT" overall health score, and analysts remain bullish with a consensus recommendation of 1.48 (Strong Buy).
In response to the positive developments, UBS has revised its 2025-26e Gross Merchandise Value (GMV) estimates upward by approximately 10% and the group’s adjusted EBITDA by 5-10%. The new price target of $176 reflects these updated estimates and the firm’s continued endorsement of Sea Ltd’s stock with a Buy rating. With a market capitalization of $79.92 billion and strong financial metrics, Sea Ltd has positioned itself as a prominent player in the entertainment industry. InvestingPro subscribers can access over 20 additional ProTips and a comprehensive analysis of Sea Ltd’s valuation and growth prospects through the exclusive Pro Research Report.
Killa’s statement emphasized the reasons behind the optimistic stance, "Sea’s Q424 results and 2025 guidance were well ahead of our and consensus expectations with e-commerce and Fintech showing stronger growth and better margins. Management was upbeat on 2025 outlook with competition in e-commerce stable and good runway for growth in both segments, while gaming grossings have also continued to grow in the eighth year of Free Fire franchise. We increase our 2025-26e GMV estimates by c10% and group adjusted EBITDA by 5-10%, with new price target of US$176 (vs US$135 earlier). Maintain Buy."
Investors and stakeholders in Sea Ltd can consider UBS’s updated analysis as they assess the company’s stock performance and future potential in the market.
In other recent news, Sea Ltd has reported strong financial results, particularly in its e-commerce and digital financial services segments. The company’s fourth-quarter performance exceeded expectations, with a 23.5% year-over-year increase in Gross Merchandise Value (GMV) and e-commerce EBITDA significantly surpassing consensus estimates. Barclays (LON:BARC) noted that Sea Ltd’s management has set a long-term EBITDA/GMV margin target of 2-3%, which seems increasingly attainable. Additionally, Sea Ltd’s digital financial services business outperformed expectations in both revenue and profits, with the company projecting significant loan book growth for 2025.
Analyst firms have responded positively to Sea Ltd’s performance, with Barclays raising its price target to $182, Benchmark adjusting its target to $150, and Bernstein increasing its target to $145. Phillip Securities upgraded the stock rating to Neutral and raised the price target to $140, despite a $250 million investment loss impacting profit after tax and minority interest. TD Cowen also showed confidence by raising the price target to $120, although it maintained a Hold rating. Analysts highlighted Sea Ltd’s strong market position and growth potential, particularly in its Shopee e-commerce platform and SeaMoney financial services. The company’s gaming segment, Garena, is expected to see double-digit growth in bookings and user numbers in 2025, despite some challenges in the previous year.
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