CLSA analyst Marcus Liu downgraded Sea Limited to Outperform from Buy while raising his price target for the shares to $39.10 from $34.40. With the shares up 34% since the Q1 earnings report, expectations for Sea's key businesses of Shopee and Garena are now "much higher" for Q2, Liu tells investors in a research note. Further, while the success of Free Fire has been behind a majority of the stock rally, more recent data points suggest that the popularity could be peaking, contends the analyst. As a result, he turned a "bit more cautious" on Sea Limited, "given the strong gaming revenue concentration in the hit title."

Loop Capital upgraded Sea Limited to Buy from Hold with a price target of $92, up from $59. The stock's valuation pressure the last two years is mainly because of aggressive competition and share loss to TikTok, the analyst tells investors in a research note. However, the firm says the recent announcement of a commission rate increase by the combined TikTok-Tokopedia, its first move since merging to satisfy Indonesian regulators, "has sparked a revaluation" Sea shares. Loop believes this signals that the shift to sustained profitable growth is "finally underway" and serves as a significant catalyst for revaluation of Sea Limited. With "competitive rationality" setting in, Loop moved from its "broken stock" valuation framework for Sea.