(C) Reuters. Up More Than 25% YTD, Will Sea Ltd. Continue to Rally?
Shares of the Southeast Asian tech company Sea Limited (SE) have been on an uptrend since the beginning of the year, driven by solid growth in the company’s e-commerce division. However, given the potential slowdown of its gaming business with the reopening of economies, its lofty valuation is a concern. Will the stock be able maintain its rally or is it due for a pullback? Read more to find out.Headquartered in Singapore, Sea Limited (SE) is engaged in digital entertainment, e-commerce, and digital financial service businesses in Asia, Latin America, and internationally. It operates through its Garena gaming platform, Shopee e-commerce platform, and SeaMoney, a digital financial services platform. SE’s shares have advanced 29% year-to-date, primarily because of a substantial surge in e-commerce revenue and its expanding global footprint.
However, its sky-high valuation and low profit might be a cause of worry for investors. Furthermore, concerns about SE’s staggering losses in the face of a potential slowdown of its gaming division with the reopening of economies could bring downward pressure on the stock.
Although the company is witnessing solid revenue growth, its business model is unstable and its losses are steep. Here is what we think could influence SE’s performance in the near term:
Up More Than 25% YTD, Will Sea Ltd. Continue to Rally?
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