On Wednesday, Sea Ltd (NYNYSE:SE:SE), an internet platform providing digital entertainment, e-commerce, and digital financial services, saw its price target increased to $69.00 from $64.00 by TD Cowen. The firm has maintained a Hold rating on the shares.
The upgrade came after Sea Ltd reported a 2.2% increase in second-quarter revenue over consensus estimates. This was attributed to a stronger-than-expected performance by Shopee, the company's e-commerce platform, which exceeded consensus projections by 2%. However, this gain was partially offset by the digital entertainment arm Garena, which fell 13% below consensus expectations.
Despite Garena's shortfall, its bookings surpassed TD Cowen's estimates due to robust user growth. Additionally, the company's overall e-commerce Gross Merchandise Volume (GMV) showed significant strength, prompting management to revise their 2024 GMV outlook upwards.
Sea Ltd's EBITDA for the quarter stood at $449 million, surpassing consensus estimates by 20%. Management has also forecasted a positive e-commerce EBITDA for the third quarter.
Following these results, TD Cowen has increased its revenue estimates for both Shopee and Garena. The firm's decision to adjust the price target to $69 reflects these revised estimates, while the Hold rating remains unchanged.
In other recent news, Sea Ltd has reported robust second-quarter 2024 results, exceeding market expectations in both revenue and profit. The company's e-commerce platform, Shopee, raised its full-year guidance, signaling improved performance and outlook.
Additionally, Garena, Sea Ltd's game development and publishing arm, returned to growth with a 21% year-over-year increase in bookings. Benchmark raised its price target on Sea Ltd to $94, maintaining a Buy rating, while BofA Securities increased its price target to $84, due to successful cost control measures and revenue matching estimates.
Shopee reported a 29% year-over-year increase in Gross Merchandise Value (GMV) in the second quarter, reaching $23.3 billion. Management anticipates Shopee to reach an adjusted EBITDA breakeven in the third quarter and projects a mid-20% range growth in GMV for fiscal year 2024. Sea Ltd's total GAAP revenue increased by 23% year-over-year to $3.8 billion, with adjusted EBITDA reaching $448 million.
InvestingPro Insights
Sea Ltd (NYSE:SE) has recently been under the spotlight with its price target uplift by TD Cowen. For investors looking to delve deeper into the company's financial health and future prospects, InvestingPro provides some compelling data and tips. With a hefty market capitalization of $42.99 billion and an impressive 23.25% return over the last week, the company shows significant market confidence. Despite a negative P/E ratio indicating that the company is not currently profitable, the revenue growth of 9.26% over the last twelve months as of Q1 2024 suggests that Sea Ltd is expanding its financial base.
InvestingPro Tips highlight that Sea Ltd holds more cash than debt on its balance sheet and is expected to see net income growth this year. Notably, two analysts have revised their earnings upwards for the upcoming period, reflecting optimism about the company's earnings potential. Additionally, the stock's price movements have been quite volatile, which could signal opportunities for traders with an appetite for risk. It's worth mentioning that Sea Ltd is trading near its 52-week high, with its price at 98.25% of this peak, indicating strong recent performance. For investors seeking more detailed analysis, InvestingPro offers several additional tips on their platform.
These insights and tips can be particularly valuable for investors assessing Sea Ltd's stock potential in light of the recent TD Cowen report. The company's strong revenue growth and positive forecast adjustments by analysts suggest a promising outlook, which is further supported by the real-time data from InvestingPro.
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