Sea Ltd. (NYSE:SE) shares fell 9.6% in U.S. trading on Wednesday, their steepest daily decline since April, breaking a rally that had driven the stock up 70% so far this year.
Helena Wang, analyst at Philip Securities, linked the sharp decline to a market correction tied to the company’s valuation. “We think it is really just the market adjusting due to stretched valuation,” Wang said.
She noted that Sea Ltd.’s valuation looks stretched after its substantial rally, with its forward price-to-earnings multiple for fiscal year 2025 standing well above the average for its industry peers.
Wang also pointed to the company’s latest quarterly results, which revealed slowing growth in gaming user metrics — a factor that could weigh on the stock’s short-term performance and momentum.
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