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Investing.com -- Sea Ltd. shares dropped 9.6% on Wednesday in U.S. trading, marking their steepest decline since April and interrupting a strong rally that had seen the stock gain 70% this year through Tuesday.
Philip Securities analyst Helena Wang attributed the sharp pullback to market adjustments related to the company’s valuation. "We think it is really just the market adjusting due to stretched valuation," Wang stated.
The analyst maintains a cautious stance on Sea Ltd. in the near term, noting that the company’s valuation appears extended following its substantial rally. Wang pointed out that Sea’s forward price-to-earnings multiple for fiscal year 2025 is significantly higher than its industry peers.
Adding to the concerns, Wang highlighted that Sea’s most recent quarterly results revealed slowing growth in gaming user metrics, which could potentially impact the stock’s short-term momentum.
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