In a report released today, Kenneth TAN from CGS-CIMB downgraded Sea (SE – Research Report) to a Hold, with a price target of $160.00.
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Kenneth TAN has given his Hold rating due to a combination of factors that suggest a potential slowdown in growth despite a strong start to 2025. Sea Ltd’s first-quarter performance exceeded expectations, particularly with a significant rebound in the digital entertainment segment and improved profitability in e-commerce and digital financial services. However, the exceptional results were partly driven by seasonal factors and impactful content releases, which may not sustain the same level of growth in subsequent quarters.
While the digital entertainment segment is expected to continue performing well, driven by new game launches and strong user engagement, the overall pace of growth in operating metrics is anticipated to moderate. This expectation of slower growth in the coming quarters, despite the company’s robust first-quarter results, has led to the decision to downgrade the stock to a Hold rating, albeit with a higher target price of US$160, reflecting adjusted EBITDA estimates. Upside risks include strong GMV growth and rapid margin improvements for Shopee, while downside risks involve increased competition in the e-commerce space potentially affecting margins.
According to TipRanks, TAN is ranked #555 out of 9511 analysts.
In another report released today, TD Cowen also maintained a Hold rating on the stock with a $140.00 price target.