Sea Ltd. (NYSE:SE) shares rose more than 2% intra-day today after Citi analysts increased their price target for the company to $113 from $90, reiterating a Buy rating based on promising growth expectations for the Southeast Asian tech giant. Sea is expected to report third-quarter 2024 results in mid-November, with significant advancements in its e-commerce and digital entertainment segments anticipated.
In its second-quarter report, Sea boosted its guidance for Shopee, its e-commerce platform, predicting full-year Gross Merchandise Value (GMV) growth in the mid-20% range year-over-year and an adjusted EBITDA turning positive in the third quarter. The analysts project Shopee’s third-quarter adjusted EBITDA to reach approximately $21 million, or 0.09% of GMV, bolstered by GMV and revenue growth rates of 21.8% and 34%, respectively, yielding a monetization rate of 12.2%.
Sea’s digital entertainment division is also expected to post strong results, with a projected 20% year-over-year increase in bookings, partly due to the residual effects of past promotional events. The analysts forecast that overall third-quarter performance will be solid, with potential slight upticks in e-commerce and digital financial services (DFS) revenue, as well as gains in games and DFS EBITDA.
Looking forward, the analysts see Sea maintaining its growth trajectory, supported by a favorable competitive environment and heightened seasonal demand in the fourth quarter.