What happened

Shares of Singapore-based e-commerce, payments, and online gaming company Sea Limited (NYSE:SE) had surged 6.4% by 10:30 a.m. EST on Monday, approaching $230 a share. This morning, analysts at Morgan Stanley (NYSE:MS) announced they are raising their price target on the stock to $250.  

Origami dollar folded into an arrow pointing up

Image source: Getty Images.

So what

It's not hard to see why Morgan Stanley thinks the stock is worth more than the $188 it previously targeted. Thanks to higher gaming revenue and increased e-commerce monetization, Morgan Stanley is projecting Sea Limited's fiscal 2022 profits will grow 467%, according to TheFly.com,

Sea has become a dominant player in e-commerce and fintech, Morgan Stanley says, and is "establishing itself as a Super App" in Southeast Asia. The company is even expanding into the realm of online banking, by buying a controlling interest in an Indonesian bank and obtaining a digital banking license in Singapore.

Now what

The foray into banking alone, Morgan Stanley says, is worth at least $6.19 a share to Sea Limited stock and could one day reach $90 a share. The midpoint of that valuation range (about $48) would account for the bulk of the difference between Morgan Stanley's old price target on Sea stock, and its new and improved price target.

But as things stand, Sea Limited as never earned a profit. According to data from S&P Global Market Intelligence, most analysts forecast that it will not turn profitable before 2023 at the earliest.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.