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Sea (SE)
NYSE:SE
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Sea
(NYSE:SE)
Rating:74Outperform
Price Target:
$169.00
▲(13.34%Upside)
Positive Factors
E-commerce Growth
Shopee sustained its strong momentum with a 29% YoY increase in revenue and a 22% YoY growth in GMV, supported by favorable seasonality and a 50bps YoY improvement in take rate.
Gaming Revenue
Free Fire's revenue growth accelerated to 51% year over year.
Negative Factors
Stock Price Premium
Current stock price implies a massive premium to global peer average, requiring e-commerce margins to be well above guided steady state margins.
Valuation Concerns
Valuations are not cheap with expectations materially increased post 1Q results.
Sea (SE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$89.46B
Dividend YieldN/A
Average Volume (3M)3.72M
Price to Earnings (P/E)104.9
Beta (1Y)1.65
Revenue Growth30.18%
EPS Growth1995.22%
CountryUS
Employees80,700
SectorConsumer Cyclical
Sector Strength59
IndustrySpecialty Retail
Share Statistics
EPS (TTM)0.91
Shares Outstanding546,492,100
10 Day Avg. Volume3,622,751
30 Day Avg. Volume3,718,858
Financial Highlights & Ratios
PEG Ratio-0.70
Price to Book (P/B)15.11
Price to Sales (P/S)0.00
P/FCF Ratio-99.08
Enterprise Value/Market Cap0.18
Enterprise Value/Revenue0.25
Enterprise Value/Gross Profit2.03
Enterprise Value/Ebitda4.40
Forecast
1Y Price Target
$178.00Price Target Upside19.37% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
Sea Business Overview & Revenue Model
Company DescriptionSea Limited, together with its subsidiaries, engages in the digital entertainment, e-commerce, and digital financial service businesses in Southeast Asia, Latin America, rest of Asia, and internationally. It offers Garena digital entertainment platform for users to access mobile and PC online games, as well as eSports operations; and access to other entertainment content, including livestreaming of gameplay and social features, such as user chat and online forums. The company also operates Shopee e-commerce platform, a mobile-centric marketplace that provides integrated payment and logistics infrastructure and seller services. In addition, it offers SeaMoney digital financial services to individuals and businesses, including offline and online mobile wallet, and payment processing services, as well as other offerings across credit, insurtech, and digital bank services under the ShopeePay, SPayLater, SeaBank, and other digital financial services brands; and payment processing services for Shopee. The company was formerly known as Garena Interactive Holding Limited and changed its name to Sea Limited in April 2017. Sea Limited was incorporated in 2009 and is headquartered in Singapore.
How the Company Makes MoneySea Limited generates revenue primarily through its three main segments. Garena, the digital entertainment division, earns money via in-game purchases and subscriptions, leveraging its strong user base and popular game titles. Shopee, the e-commerce platform, makes money through transaction fees, advertising, and logistics services. SeaMoney, the digital financial services arm, contributes to the company's revenue through payment processing fees, loan interest, and other financial services charges. Strategic partnerships with financial institutions and technology firms enhance Sea's offerings and drive growth across its businesses.
Sea Key Performance Indicators (KPIs)
Any
Garena Quarterly Active Users
Measures the number of users engaging with Garena's platform each quarter, indicating the platform's popularity and potential for monetization through in-game purchases.
Measures the number of users engaging with Garena's platform each quarter, indicating the platform's popularity and potential for monetization through in-game purchases.
Data provided by:
Main Street Data
Main Street DataSea Earnings Call Summary
Earnings Call Date:May 13, 2025
(Q1-2025)
| % Change Since: 4.68%|
Next Earnings Date:Aug 19, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant growth across all business segments, with record e-commerce performance, strong digital financial services expansion, and an impressive rebound in digital entertainment. Despite some challenges related to forex fluctuations and competitive pressures, Sea Limited has shown robust profitability improvements and strategic growth initiatives, particularly in the fintech sector.Q1-2025 Updates
Positive Updates
Record E-commerce Growth
Shopee delivered a record high GMV and gross order volume in the first quarter, with a 22% year-on-year increase in GMV to $28.6 billion and a 20% increase in growth orders to $3.1 billion.
Digital Financial Services Expansion
Monee's first-quarter revenue and adjusted EBITDA grew by more than 50% year-on-year, with a loan book increase of over 75% year-on-year to $5.8 billion.
Strong Digital Entertainment Performance
Garena's bookings grew 51% year-on-year, achieving the best quarterly performance since 2021, and adjusted EBITDA increased by 57%.
Improved Profitability
Sea Limited's total adjusted EBITDA was $947 million in the first quarter of 2025, compared to $401 million in the first quarter of 2024.
Successful Rebranding
The digital financial services business was successfully rebranded from SeaMoney to Monee, signaling a new phase of growth and expanded offerings.
Negative Updates
Forex Rate Fluctuations
Potential negative impacts on Shopee's growth due to fluctuations in foreign exchange rates in some markets.
Competitive Landscape Challenges
The introduction of TikTok Shop in Brazil and competitive pressures in ASEAN markets could impact Shopee's market share and growth dynamics.
Seasonal and Regional Volatility
Potential quarterly volatility in digital entertainment bookings due to the timing of significant collaborations and cultural events like Ramadan.
Company Guidance
In the Sea Limited First Quarter 2025 Results Conference Call, the company provided guidance across its three main business segments, emphasizing strong growth and improving profitability. For e-commerce, Shopee achieved a record high GMV of $28.6 billion, reflecting a 22% year-on-year increase and a 20% growth in gross order volume. Ad revenue saw significant growth, increasing by over 50% year-on-year, while logistics costs per order were reduced by 6% in Asia and 21% in Brazil. Sea's digital financial services segment, recently rebranded to Monee, expanded its loan book by over 75% year-on-year, reaching $5.8 billion, with revenue and adjusted EBITDA both growing more than 50%. The digital entertainment segment, Garena, reported a 51% increase in bookings and a 57% rise in adjusted EBITDA year-on-year, fueled by successful campaigns, including a collaboration with NARUTO SHIPPUDEN. The company maintains a 20% full-year GMV growth guidance for Shopee and expects continued strong performance across all segments.Sea Financial Statement Overview
Summary
Sea Limited demonstrates strong financial health with consistent revenue and profit growth, efficient cost management, and robust cash flow generation. The company maintains a balanced capital structure with moderate leverage and improving equity returns.Income Statement
Sea has demonstrated robust revenue growth, with Total Revenue increasing from $16.8 billion in 2024 to $17.9 billion in TTM (Trailing-Twelve-Months), reflecting a 5.9% growth rate. The Gross Profit Margin improved to 44% in TTM, indicating strong cost management. The Net Profit Margin rose significantly to 4.9% in TTM, reflecting enhanced profitability, supported by a positive EBIT Margin of 5.8% and an EBITDA Margin of 7.9%.85
Very Positive
Balance Sheet
The Debt-to-Equity Ratio stands at 0.46 in TTM, showing a moderate level of leverage. The Return on Equity (ROE) improved to 9.8% in TTM, signaling better returns for shareholders. The Equity Ratio is at 37.6%, which suggests a solid capital structure, although there is room for improvement in equity financing.78
Positive
Cash Flow
Sea's Free Cash Flow increased from $2.96 billion in 2024 to $3.5 billion in TTM, indicating a 18.6% growth, which is a positive signal for cash generation. The Operating Cash Flow to Net Income Ratio is 4.07 in TTM, showing strong cash generation efficiency. The Free Cash Flow to Net Income Ratio is 4.00 in TTM, which signifies effective conversion of income into free cash.82
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 17.92B | 16.82B | 13.06B | 12.45B | 9.96B | 4.38B |
| Gross Profit | 7.88B | 7.21B | 5.83B | 5.19B | 3.90B | 1.35B |
| EBITDA | 1.42B | 1.20B | 908.47M | -1.02B | -1.30B | -1.18B |
| Net Income | 875.34M | 444.32M | 150.73M | -1.67B | -2.05B | -1.62B |
Balance Sheet | ||||||
| Total Assets | 23.84B | 22.63B | 18.88B | 17.00B | 18.76B | 10.46B |
| Cash, Cash Equivalents and Short-Term Investments | 8.43B | 8.62B | 5.36B | 6.89B | 10.16B | 6.29B |
| Total Debt | 4.15B | 4.12B | 4.46B | 4.49B | 4.25B | 2.09B |
| Total Liabilities | 14.77B | 14.15B | 12.19B | 11.19B | 11.33B | 7.04B |
| Stockholders Equity | 8.96B | 8.37B | 6.59B | 5.72B | 7.40B | 3.38B |
Cash Flow | ||||||
| Free Cash Flow | 3.50B | 2.96B | 1.82B | -2.03B | -598.53M | 219.59M |
| Operating Cash Flow | 3.56B | 3.28B | 2.08B | -1.06B | 208.65M | 555.87M |
| Investing Cash Flow | -5.30B | -5.04B | -5.80B | -2.43B | -3.77B | -886.91M |
| Financing Cash Flow | 1.78B | 1.68B | 366.01M | 400.26M | 7.40B | 3.73B |
Sea Technical Analysis
Neutral
149.11
Price Trends
154.16
Negative
140.28
Positive
123.53
Positive
Market Momentum
-1.27
Positive
41.15
Neutral
19.22
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE, the sentiment is Neutral. The current price of 149.11 is below the 20-day moving average (MA) of 155.22, below the 50-day MA of 154.16, and above the 200-day MA of 123.53, indicating a neutral trend. The MACD of -1.27 indicates Positive momentum. The RSI at 41.15 is Neutral, neither overbought nor oversold. The STOCH value of 19.22 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SE.
Sea Risk Analysis
Sea disclosed 60 risk factors in its most recent earnings report. Sea reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
We face manpower-related risks. Q4, 2022
2.
We face risks related to our insurance business. Q4, 2022
3.
We face risks related to logistics and fulfillment. Q4, 2022
Sea Peers Comparison
Overall Rating
UnderperformOutperform
Sector (56)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $51.17B | 7.98 | 19.81% | 3.00% | 8.13% | 91.39% | |
77 Outperform | $34.99B | 18.14 | 36.48% | 1.54% | 2.04% | -15.61% | |
74 Outperform | $89.46B | 104.86 | 11.13% | ― | 30.18% | 1995.22% | |
74 Outperform | $126.80B | 60.92 | 49.11% | ― | 41.92% | 81.11% | |
74 Outperform | $54.47B | 216.85 | 6.06% | ― | 20.88% | -80.08% | |
64 Neutral | $5.60B | 37.98 | -39.97% | ― | 2.18% | -32.87% | |
56 Neutral | HK$24.58B | 3.79 | -2.03% | 6.58% | -0.32% | -67.68% |
* Consumer Cyclical Sector Average
Performance Comparison
SE
Sea
152.74
78.03
104.44%
EBAY
eBay
76.32
24.25
46.57%
MELI
Mercadolibre
2,477.08
773.53
45.41%
JD
JD
32.70
5.94
22.20%
ETSY
Etsy
54.13
-3.19
-5.57%
CPNG
Coupang
30.17
8.80
41.18%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.