Shares of Singapore-based internet services company Sea Limited slid Tuesday, following a warning from a Sea stock analyst that the company is seeing increased e-commerce competition.
JPMorgan analysts late Monday downgraded their outlook on Sea stock to neutral from a positive overweight. The analysts also lowered their price target for Sea stock to 78 from 84. After a strong run for the company, analysts now view Sea's shares as fairly valued, according to a client note reported by financial news site The Fly.
The analysts also believe Sea's Shopee e-commerce business is facing stepped up competition from firms like and Temu, which is owned by PDD Holdings.
On the stock market today, U.S.-listed Sea stock lost more than 2% to close at 74.19. The shares have gained more than 80% so far this year.
Sea Stock: Hot E-Commerce Pick In 2024
Sea's holdings include the e-commerce focused Shopee, which services Southeast Asia and Taiwan. The company also owns digital-payments provider SeaMoney and Garena, a global online games developer.
Shopee is the largest business, contributing $9 billion out of Sea's $13.1 billion in 2023 sales.
Sea stock struggled last year after the company warned it would need to spend more on marketing and other efforts to ward off challengers in e-commerce.
But Shopee sales accelerated late in 2023 and in the first quarter this year, helping power gains for Sea stock. Shares are up 82.5% in 2024 including Tuesday's slide.
Sea stock had a so-so IBD Composite Rating of 74 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
But Sea's IBD Relative Strength Rating is a much stronger 97 out of 99, underscoring its outperformance compared to the rest of the market.
