Sea’s Growth Engine: What to Expect from Q1 2025 Results

As of May 9, 2025, the analyst community remains largely positive on Sea. According to Bloomberg data, 82% of analysts rate the stock a "Buy," 15% recommend "Hold," and only 2.6% suggest "Sell." The consensus 12-month target price ranges from USD 135 to USD 182, with the current share price around USD 146.

Major brokers such as Barclays, DBS, Macquarie, and HSBC maintain "Buy" or "Outperform" ratings, while J.P. Morgan recently downgraded Sea to "Neutral" and trimmed its target price to USD 135, citing increased macro risks, especially for e-commerce and fintech.

Consensus forecasts and J.P. Morgan estimates highlight several growth drivers across Sea’s key segments:

Garena is anticipated to show revenue of USD 534 million, which represents about 17% increase YoY. Adjusted EBITDA for Garena is expected to be around USD 314 million, indicating stabilizing performance. Free Fire engagement is showing signs of improvement due to festive period in Q1 2025.

Shopee remains a major driver and is projected to achieve approximately USD 3.65 billion in revenue, with adjusted EBITDA improving to USD 166 million which represents approximately 33% YoY increase in Q1 2025. GMV growth is expected at over 23%, highlighting continued expansion in the Southeast Asian e-commerce market.

Revenue in SeaMoney is forecast to grow approximately 48% and reach USD 738 million, adjusted EBITDA expected at USD 247 million for Q1 2025.

Sea’s management has focused on profitable growth, cost discipline, and ecosystem expansion. Shopee continues to drive e-commerce penetration in Southeast Asia, while SeaMoney is scaling its digital financial services footprint, albeit with some caution on credit risk. Garena, anchored by Free Fire, is showing signs of stabilization with higher user engagement during festive periods.

Looking ahead, the company faces a more uncertain macro environment. J.P. Morgan’s latest report highlights risks from trade tensions, tariff increases, and softer consumer spending, which could weigh on e-commerce GMV and ad revenue. SeaMoney may also see higher credit costs if economic conditions deteriorate.

Despite these challenges, Sea’s strong balance sheet and improving profitability provide resilience. The company’s ability to deliver positive adjusted EBITDA across all segments is a key differentiator in the regional tech landscape.

1) Macro Headwinds: Trade policy uncertainty, tariffs, and a weaker consumer environment could dampen growth, especially for Shopee and SeaMoney.

2) Valuation Compression: J.P. Morgan has lowered its valuation multiples for Sea’s e-commerce and fintech businesses, reflecting sector-wide derating.

3) Competition: Intensifying competition in e-commerce and fintech across Southeast Asia could pressure margins and market share.

4) Credit Risk: As SeaMoney expands, credit quality and provisioning will be closely watched.

With Sea’s Q1 earnings approaching, investor sentiment is cautiously optimistic. The consensus remains bullish, but the recent moderation in target prices and ratings signals a more balanced risk-reward profile.