Sea (SE) AI Stock Analysis

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Sea

(NYSE:SE)

Rating:77Outperform

Price Target:

$175.00

▲(11.27%Upside)

Sea Limited's overall stock score reflects strong financial performance and impressive earnings call highlights, indicating robust growth. However, a high P/E ratio suggests overvaluation, and technical indicators provide mixed signals, slightly tempering the overall positive outlook.

Positive Factors

Competitive Position

Shopee has built a strong competitive position in the low-ticket item segment of the EC market.

Financial Performance

Shopee Brazil became adj. EBITDA positive driven by high order density and improving cost efficiency.

Revenue 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.

Negative Factors

Recommendation Downgrade

Recommendation was downgraded from Accumulate to Neutral due to the recent share price rally, indicating minimal upside.

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

$93.65B

Dividend YieldN/A

Average Volume (3M)4.53M

Price to Earnings (P/E)110.6

Beta (1Y)1.65

Revenue Growth30.18%

EPS Growth1995.22%

CountryUS

Employees80,700

SectorConsumer Cyclical

Sector Strength58

IndustrySpecialty Retail

Share Statistics

EPS (TTM)0.91

Shares Outstanding546,492,100

10 Day Avg. Volume3,906,303

30 Day Avg. Volume4,530,964

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 Cap0.17

Enterprise Value/Revenue0.25

Enterprise Value/Gross Profit2.03

Enterprise Value/Ebitda4.40

Forecast

1Y Price Target

$176.29

Price Target Upside12.09% 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

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.

Chart InsightsGarena's active users have rebounded significantly since early 2023, reversing the prior decline. This resurgence aligns with a 51% increase in bookings and a 57% rise in adjusted EBITDA, driven by successful campaigns like the NARUTO SHIPPUDEN collaboration. The earnings call highlights robust growth in digital entertainment, suggesting strategic initiatives are effectively re-engaging users. However, potential volatility due to seasonal events and collaborations could impact future user metrics. Investors should watch for sustained engagement to gauge long-term momentum.

Data provided by:

Main Street Data

Sea Earnings Call Summary

Earnings Call Date:May 13, 2025

(Q1-2025)

% Change Since: 10.40%|

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

Very Positive

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%.

Balance Sheet

Positive

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.

Cash Flow

Very Positive

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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
	EBIT
1.05B	662.15M	224.78M	-1.13B	-1.58B	-1.30B
	EBITDA
1.42B	1.20B	908.47M	-1.02B	-1.30B	-1.18B
	Net Income Common Stockholders
875.34M	444.32M	150.73M	-1.67B	-2.05B	-1.62B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
8.43B	8.62B	5.36B	6.89B	10.16B	6.29B
	Total Assets
23.84B	22.63B	18.88B	17.00B	18.76B	10.46B
	Total Debt
4.15B	4.12B	4.46B	4.49B	4.25B	2.09B
	Net Debt
1.97B	1.72B	1.65B	-1.54B	-4.99B	-4.07B
	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

Technical Analysis Sentiment

Neutral

Last Price157.27

Price Trends

50DMA

144.56

Positive

100DMA

136.11

Positive

200DMA

118.61

Positive

Market Momentum

MACD

2.41

Positive

RSI

51.40

Neutral

STOCH

20.33

Neutral

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 157.27 is below the 20-day moving average (MA) of 161.88, above the 50-day MA of 144.56, and above the 200-day MA of 118.61, indicating a neutral trend. The MACD of 2.41 indicates Positive momentum. The RSI at 51.40 is Neutral, neither overbought nor oversold. The STOCH value of 20.33 is Neutral, 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

We face manpower-related risks. Q4, 2022

We face risks related to our insurance business. Q4, 2022

We face risks related to logistics and fulfillment. Q4, 2022

Sea Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MELI	80 Outperform	$124.45B	60.38	49.11%	―	41.92%	81.11%
JD	78 Outperform	$52.45B	8.17	19.81%	2.93%	8.13%	91.39%
SE	77 Outperform	$93.65B	110.60	11.13%	―	30.18%	1995.22%
EBAY	77 Outperform	$35.82B	18.57	36.48%	1.49%	2.04%	-15.61%
CPNG	74 Outperform	$51.45B	204.92	6.06%	―	20.88%	-80.08%
ETSY	68 Neutral	$5.62B	38.74	-39.97%	―	2.18%	-32.87%
Sector *	62 Neutral	$6.86B	11.07	2.77%	4.27%	2.66%	-24.95%

* Consumer Cyclical Sector Average

Performance Comparison

Sea

157.27

80.99

106.17%

EBAY

eBay

77.40

23.79

44.38%

MELI

Mercadolibre

2,389.48

816.08

51.87%

33.17

4.12

14.18%

ETSY

Etsy

54.53

-3.14

-5.44%

CPNG

Coupang

28.25

7.86

38.55%

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.