Sea ( (SE) ) has fallen by -7.73%. Read on to learn why.
Claim 70% Off TipRanks Premium
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential
Sea’s stock fell 7.73% over the past week, even as analysts turned more positive on the company’s long-term prospects. The pullback comes after a strong run earlier this year and reflects renewed worries about profit margins, with several brokers trimming earnings forecasts to account for higher investment spending. Bank of America, for example, cut its price target on Sea from $200 to $182, citing reduced margins as the company steps up spending across its platforms, though it maintained a Buy rating.
At the same time, other analysts see the recent weakness as an opportunity. Maybank’s Hussaini Saifee upgraded Sea to Buy with a $156 target, arguing that much of the bad news is already priced in after the stock lost roughly a third of its value from 2025 highs. Saifee highlights that Sea’s core businesses in e‑commerce (Shopee), gaming (Garena) and digital finance remain intact, with resilient demand in Southeast Asia and a still‑growing user base. Recent quarterly numbers support this view: revenue surged to $5.26 billion from $3.81 billion a year earlier, and net profit climbed sharply to $414.2 million from $79.91 million.
The near-term pressure on the share price is mainly about margins rather than growth. Shopee is spending aggressively on its VIP loyalty program and competition in markets like Brazil, moves that could slightly weigh on profitability through 2026. Yet analysts argue these investments are strategic, aimed at cementing Shopee’s dominant position and setting up stronger monetisation from around 2027 onward. Additional upside could come from Sea’s fintech arm, including its “buy now, pay later” and micro‑lending service Monee, and from a still‑profitable Garena gaming unit that now represents a smaller share of overall valuation. For investors, the current drop in Sea’s stock may reflect short-term caution on margins rather than a loss of confidence in the company’s long-term growth story.