On Wednesday, Sea Ltd (NYNYSE:SE:SE) saw its price target increased by TD Cowen from $52.00 to $64.00, while the Hold rating on the stock was maintained. The adjustment came after the company reported its first-quarter revenue, which showed a mixed performance across its business segments.
Sea Ltd's e-commerce platform Shopee exceeded expectations with a 6% revenue beat, while the digital entertainment arm Garena fell short by 9%. Despite Garena's underperformance in comparison to consensus estimates, it still managed to top TD Cowen's projections due to strong user growth. Moreover, the e-commerce gross merchandise value (GMV) growth accelerated impressively, reaching 36% year-over-year.
The company's EBITDA for the quarter was reported at $401 million, surpassing consensus estimates by a significant 67%. In light of these results, management has decided to maintain its full-year 2024 guidance.
TD Cowen has revised its estimates for both Shopee and Garena, leading to the new price target of $64 while reiterating the Hold rating on Sea Ltd shares. The firm's analysis reflects the latest financial outcomes and the potential of the company's diverse business operations.
InvestingPro Insights
Sea Ltd's financial health and market performance reveal additional layers of insight that could be of interest to investors. The company's adjusted market capitalization stands at a robust $38.06 billion, which underscores its significant presence in the sector. However, it is essential to note that Sea Ltd is trading at a high earnings multiple, with a P/E ratio as of Q4 2023 at 130.66, suggesting a premium valuation by the market.
From a growth perspective, Sea Ltd's revenue growth in the last twelve months as of Q4 2023 was 4.93%, indicating a steady increase. This growth is further supported by a gross profit margin of 44.66%, which reflects the company's ability to maintain profitability. Moreover, with a sharp EBITDA growth of 211.26% in the same period, the company's operational efficiency seems to be on an upward trajectory.
InvestingPro Tips highlight that Sea Ltd holds more cash than debt on its balance sheet, which is a reassuring sign for investors concerned about the company's financial sustainability. Additionally, the company's net income is expected to grow this year, and three analysts have revised their earnings upwards for the upcoming period. These factors, combined with a strong return of 50.63% over the last three months, could be a signal of the company's strong market performance and potential for future growth.
For those looking to delve deeper into Sea Ltd's performance and future outlook, there are more InvestingPro Tips available at https://www.investing.com/pro/SE. With a total of 15 additional tips listed, investors can gain a comprehensive understanding of the company's financials and market position. To access this valuable resource, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, enhancing your investment research with expert insights.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.