Balanced Outlook on Sea: High Valuation and Mixed Signals Justify Hold Rating

In a report released today, Sachin Salgaonkar from Bank of America Securities maintained a Hold rating on Sea (SE – Research Report), with a price target of $170.00.

Sachin Salgaonkar has given his Hold rating due to a combination of factors that reflect both optimism and caution regarding Sea’s stock. The valuation of Sea is considered high, with a 2026 consensus P/E ratio significantly above its e-commerce peers. Despite this, many long-term investors remain committed to the stock due to its strong momentum, although some hedge funds have reduced their positions following a strong year-to-date performance.
Another critical factor is the performance of Shopee’s EBITDA margins, which are closely monitored by investors. While the consensus expects margins to be modest, there is limited room for positive surprises. Additionally, the fintech business has received mixed feedback, with some investors requiring more confidence in the quality of its book. The current stock price implies a high EBITDA multiple, suggesting that Sea’s e-commerce margins need to exceed expectations to justify this valuation. Given these considerations, Salgaonkar maintains a Neutral rating, balancing the risks and rewards.

According to TipRanks, Salgaonkar is a 5-star analyst with an average return of 20.7% and a 60.00% success rate.

In another report released on May 23, Phillip Securities also downgraded the stock to a Hold with a $160.00 price target.