Loop Capital Markets raised its price target for Sea Limited (NYSE:SE) from $165 to $190 on May 29 while maintaining a Buy rating on the company’s shares. The change occurred as the firm expects the company’s gaming and e-commerce divisions to report stronger performance.
With an EBITDA margin of 0.9% of GMV, Sea Limited’s e-commerce platform, Shopee, has significantly improved after three quarters of negative numbers. Owing to these developments, Loop Capital now thinks that the management’s target of a 2% to 3% GMV margin may be understated. Depending on the expansion of retail media, consumer data, and AI-driven advertising technologies for Sea Ltd., analysts at Loop Capital estimate that Shopee’s long-term earnings potential might surpass 6% of GMV.
Additionally, strong intellectual property partnerships have allowed Sea Limited’s gaming division, Garena, to surpass expectations. Likewise the company’s fintech division is expanding, thus offering what Loop Capital refers to as an “open-ended opportunity” for growth.
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