Sea Ltd. (SE) PT Raised to $84 at BofA Securities
BofA Securities analyst Sachin Salgaonkar raised the price target on Sea Ltd. (NYSE: SE) to $84.00 (from $77.00) while maintaining a Buy rating.
The analyst comments "Sea’s revenues came in-line with our estimate, but net income was a beat led by lower than estimated S&M costs. Shopee’s adj EBITDA losses in 2Q were $9mn, in-line with BofAe $5.5mn loss. Mgmt. revised e-com guidance for Shopee to achieve adj. EBITDA breakeven in 3Q and FY24 GMV growth in mid-20% range. Commentary on the call was also positive where management highlighted it is looking to grow while continuing to invest to maintain competitive advantage. Result: Shopee GMV in 2Q came in at $23.3bn (-2% qoq/+29% yoy), in-line with BofAe of $23.1 bn. Shopee take rates inched up to 12.1%. E-com adj EBITDA for Asian markets came at US$3.8mn profit, with other markets’ adj. EBITDA loss was $13mn. In Brazil, Shopee achieved positive contribution margin per order of 9c. Gaming revenue was 5% qoq lower, came 6% below BofAe, with gaming ARPUs 4% below estimate. We revise our FY24/25E EPS and move target multiples for gaming to 6.5X FY25E EV/EBITDA (from 5.5X) and for Shopee to 0.28X FY25E EV/ GMV (from 0.25X) to factor in better momentum at businesses. Our SOTP based PO moves to $84 (from $77). Maintain Buy on Sea, given favorable risk-reward."