Sea Limited: Strong Growth but Stretched Valuation Prompts Downgrade to Neutral

Sea (SE – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Helena Wang from Phillip Securities downgraded the rating on the stock to a Hold and gave it a $160.00 price target.

Helena Wang’s rating is based on a combination of factors that reflect both the positive performance and the current valuation of Sea Limited. The company’s revenue and profit after tax and minority interest for the first quarter of 2025 were in line with expectations, showing a 30% year-over-year growth, primarily driven by the strong performance of Shopee and Monee. Despite this positive momentum, the recent rally in Sea’s share price has led to a valuation that appears stretched, prompting a downgrade from an Accumulate to a Neutral recommendation.
While the company has shown impressive growth across its segments, with Shopee turning profitable and Monee experiencing its fastest growth in two years, the potential for further upside seems limited due to the current high valuation. The target price has been adjusted to reflect the improved growth outlook, but the significant price increase in the stock leaves minimal room for further appreciation. Consequently, the Hold rating reflects a balanced view of the company’s strong operational performance against its current market valuation.

In another report released on May 14, TD Cowen also maintained a Hold rating on the stock with a $140.00 price target.