What happened

Shares of Sea Limited (SE -3.26%) were gaining today after the provider of online gaming and e-commerce services in Southeast Asia got a bullish analyst note.

As of 11:32 a.m. EDT on Wednesday, the stock was up 7%.

So what

Stephens analyst Jeff Cohen initiated coverage on Sea Tuesday night with an overweight rating and a price target of $130, representing 21% upside from Tuesday's closing price.

The Sea Limited logo

Image source: Sea Limited.

Cohen noted the favorable demographics in the region with a large and growing millennial population as well as increasing GDP per capita and internet penetration. He also sees potential for strong expansion across all three of Sea's business lines: gaming, mobile payments, and e-commerce, each of which reinforces the other, providing a competitive advantage.

Now what

Sea has been one of the biggest winners during the pandemic as the stock has nearly tripled this year, with investors believing the company is well suited to handle the current crisis. With its focus on digital gaming, e-commerce, and mobile payments, Sea's businesses seem like beneficiaries as social distancing and spending more time at home should lead to increases in online gaming and e-commerce.

In addition, Sea gives investors exposure to a part of the world that has handled the pandemic relatively well compared with the U.S., so the economy in Southeast Asia should return to growth more quickly.

In its most recent quarter, adjusted revenue jumped 58% to $913.9 million, and considering the large addressable market the company can serve in the region, Sea could have a lot of growth ahead of it.