Sea Ltd maintains Buy rating and stock target on strong Q2 results

On Tuesday, Sea Ltd (NYSE:SE) retained its Buy rating and $89.00 stock price target from an analyst at Jefferies. The company’s second-quarter results for the fiscal year 2024 surpassed expectations, with a notable performance from its Shopee segment.

Shopee’s Gross Merchandise Volume (GMV) saw a year-over-year increase of 29%, exceeding the analyst’s projection of 26%. Additionally, the segment’s adjusted EBITDA losses were slightly better than anticipated, coming in at $9.2 million compared to the estimated $10 million.

The group’s overall adjusted EBITDA was reported at approximately $449 million, outperforming the consensus estimate of $397 million. This strong financial performance reflects the company’s ability to exceed market expectations and continue its growth trajectory.

Looking ahead, Sea Ltd’s Shopee segment is expected to achieve positive adjusted EBITDA starting from the third quarter. The company has also revised its full-year GMV growth forecast upward to the mid-20s percentage range, a significant increase from the previously anticipated high teens. This revision indicates confidence in the segment’s continued expansion and profitability.

The positive outlook for Shopee is a key factor in the firm’s optimistic stance on Sea Ltd. (NYSE:) With the segment’s narrowing losses and the upward revision in GMV growth expectations, the company is demonstrating solid progress towards sustainable profitability.

Sea Ltd’s stock retains its favorable rating based on the latest financial results and forward-looking projections. The company’s ability to surpass analyst estimates and its positive outlook for the upcoming quarters contribute to the analyst’s continued endorsement of the stock at the current price target.

In other recent news, Sea Ltd has seen several developments. Citi has adjusted its price target for the company to $80, maintaining a Buy rating, and expects a 27% year-over-year revenue growth to $2.68 billion. BofA Securities has raised its price target for Sea Ltd to $77, anticipating a 23% increase in revenue to $3.8 billion. JPMorgan, however, has downgraded Sea Ltd from Overweight to Neutral, adjusting the price target to $78, citing increasing competition in the e-commerce sector.

Jefferies maintains a Buy rating and a $89.00 price target for the company’s stock, anticipating steady performance across Sea Ltd’s various business segments. Loop Capital has also increased its price target for Sea Ltd to $94, echoing BofA’s confidence in the company’s prospects. These are recent developments that investors should consider when evaluating Sea Ltd’s performance and future prospects.

InvestingPro Insights

Sea Ltd (NYSE:SE) has shown a remarkable financial resilience, as reflected in its latest earnings report, and the InvestingPro platform provides additional insights that could be of interest to investors. Notably, Sea Ltd holds more cash than debt on its balance sheet, which can be a sign of financial stability and flexibility. Additionally, analysts have revised their earnings expectations upwards for the upcoming period, signaling confidence in the company’s growth prospects.

InvestingPro Data further enriches the picture with key metrics: Sea Ltd’s market capitalization stands at a robust $38.43 billion, and despite trading at a high earnings multiple with a P/E ratio of 1698.55, the company has a PEG ratio of 9.53, suggesting that investors may be expecting high future earnings growth relative to the current earnings multiple. Moreover, the company’s revenue has grown by 9.26% over the last twelve months as of Q1 2024, indicating a healthy upward trajectory.

For investors looking for a deeper dive into Sea Ltd’s financial health and future potential, InvestingPro offers a wealth of additional tips — there are 15 more InvestingPro Tips available, which can be accessed for more nuanced investment decisions. These tips and data points can help investors understand the full landscape of Sea Ltd’s performance and potential, complementing the positive outlook presented by analysts.

To explore these insights and more, prospective investors can visit https://www.investing.com/pro/SE for an in-depth analysis provided by InvestingPro.

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