This global tech stock is up 70% this year and Goldman says there's more room to run

Published Thu, Nov 11 20216:30 PM EST

Shares of e-commerce and gaming company Sea have outperformed Meta , Apple and Amazon this year. Here's what Goldman Sachs is expecting for the U.S.-listed company ahead of earnings next week. Sea — Southeast Asia's most valuable company — has enjoyed a meteoric rise since it went public on the New York Stock Exchange in 2017. Shares in the company closed at around $335 on Nov.10, a more than 20-fold increase since its debut. They're up around 71% year-to-date. The sharp jump in valuation has coincided with a period of rapid expansion for the Tencent-backed company, as it rode the success of popular gaming titles and a strategic entry into Southeast Asia's nascent online retail market. The company has three main businesses: its gaming platform Garena, e-commerce platform Shopee and digital financial services platform SeaMoney Despite the stock's recent performance, Goldman Sachs says its got further to run. The Wall Street firm has raised its 12-month price target for Sea to $460 from $410 previously — an implied upside of 37% to its Nov. 10 closing price. 'A winner' "We view Sea as a winner in the fast-growing gaming, e-commerce, and digital finance markets in Asia, and expect further upside from its successful move into [Latin America], with potential upside from its expansion into Europe and India ecommerce markets," analysts Piyush Mubayi and Pang Vittayaamnuaykoon wrote on Nov. 9. The analysts noted that the company's e-commerce platform Shopee has become a global platform with the expansion of its footprint into Europe and South Asia. It is expected to capture approximately 5% market share on average in these new markets by 2025, the analysts noted. Despite its growth, Sea does not appear to be resting on its laurels. In September, the company raised about $6 billion in the biggest ever equity offering by a Southeast Asian company. The company noted at that time that it intended to utilize the proceeds for "business expansion and other general corporate purposes, including potential strategic investments and acquisitions." Ahead of the release of Sea's third-quarter earnings on Nov. 16, Goldman said it is expecting Sea to deliver improved contributions across its three businesses. The bank expects the company's gaming segment to post a 30% growth in gaming gross billings from a year ago, while earnings before interest, taxes, depreciation, and amortization (EBITDA) margins — a measure of a company's operating performance — are expected to remain at 62.7%, the analysts said. Meanwhile, the company's e-commerce segment is expected to post a 79% increase in gross merchandise value compared to a year ago, while its fintech arm is expected to see an increase in revenue to $116 million from $89 million in the previous quarter. Goldman isn't the only investment bank looking closely at Sea. On Nov. 2, Barclays initiated coverage on Sea with an overweight-rating and a price target of $427. The British bank has forecast revenue of $3.1 billion for the third-quarter, an increase of 152% from a year ago. Gross margin for the third-quarter is expected to come in at 42%, while adjusted EBITDA is expected to be $73.3 million, Barclays analyst Jiong Shao said.

Forrest Li, CEO and co-founder of Sea Ltd, center left, and Nick Nash, president of Sea Ltd, center right, ring the opening bell at the New York Stock Exchange during the company's initial public offering (IPO) on Oct. 20, 2017.

Michael Nagle | Bloomberg via Getty Images

Shares of e-commerce and gaming company Sea have outperformed Meta, Apple and Amazon this year. Here's what Goldman Sachs is expecting for the U.S.-listed company ahead of earnings next week.