What Happened:

Shares of e-commerce and gaming company Sea (NYSE:SE) jumped 7.5% in the morning session after J.P. Morgan analysts highlighted the opportunity for the company's e-commerce business, Shopee Indonesia, to "increase take rates" following the recent decision by competitor TikTok Indonesia to raise commissions in the region. 

The analysts added, "In our view, the adjustments by TikTok leave room for Shopee Indonesia to increase take-rates after Shopee materially increased take-rates in other countries across ASEAN. The changes by platforms are indicative of a better competitive environment in ASEAN with an incrementally higher focus on ROI." 

J.P. Morgan has an Overweight (Buy) rating on SE with a $70 price target. The price target indicates more than 20% upside from where shares traded when the research report was released.

Is now the time to buy Sea? Access our full analysis report here, it's free.

What is the market telling us:

Sea's shares are not very volatile than the market average and over the last year have had no moves greater than 5%. 

The biggest move we wrote about over the last year was about a month ago, when the stock gained 16.6% on the news that the company reported fourth-quarter results that narrowly topped analysts' revenue and adjusted EBITDA expectations. Notably, the company announced the first full year of annual profit since its IPO. The company noted that despite growing competition in the e-commerce market in South East Asia, Shopee (SEA's e-commerce business) is gaining market share. As a result, the company expects Shopee's full-year GMV growth to be in the high teens range and its adjusted EBITDA to turn positive in the second half of this year. Despite a challenging macro environment, SeaMoney (SEA's fintech operation) recorded the first year of positive profit in 2023. Finally, Sea's game studio, Garena, recorded huge success with Free Fire, one of its published games, emerging as the most downloaded mobile game globally, according to Sensor Tower. 

Overall, this was a solid quarter for Sea, given the beat on adjusted EBITDA and profitability and the reassuring outlook.

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