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Sea (SE)
NYSE:SE
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Sea
(NYSE:SE)
78Outperform
Positive Factors
Earnings
Better-than-expected Shopee revenue and much better-than-expected Shopee profits kicked off the cycle of significant profit growth for SE.
Market Position
Sea Ltd. is a dominant e-commerce, gaming, and fintech player in Southeast Asia, holding the No.1 market position across the region.
Profitability
Shopee achieved profitability in both its Asian markets and Brazil for the second consecutive quarter, highlighting a stable competitive environment.
Negative Factors
Gaming Visibility
The gaming business lacks long-term visibility, needing new hit games to maintain gaming adjusted EBITDA, which poses a challenge.
Investment Loss
PATMI missed due to a higher-than-expected investment loss of $0.25bn.
Sea (SE) vs. S&P 500 (SPY)
Market Cap
$72.41B
Dividend YieldN/A
Average Volume (3M)5.21M
Price to Earnings (P/E)168.7
Beta (1Y)1.39
Revenue Growth28.46%
EPS Growth185.04%
CountryUS
Employees62,700
SectorConsumer Cyclical
Sector Strength49
IndustryRetail - Discretionary
Share Statistics
EPS (TTM)0.75
Shares Outstanding528,812,200
10 Day Avg. Volume5,329,863
30 Day Avg. Volume5,213,764
Financial Highlights & Ratios
PEG Ratio0.91
Price to Book (P/B)N/A
Price to Sales (P/S)5.54
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$153.05Price Target Upside21.40% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
Sea Business Overview & Revenue Model
Company DescriptionFounded in 2009, Singapore-based Sea Limited is an internet and mobile platform company, which provides provides online personal computer and mobile digital content, e-commerce, gaming services and payment platforms. The company operates through three core businesses across digital entertainment, e-commerce, as well as digital payments and financial services, known as Garena, Shopee, and SeaMoney, respectively.
How the Company Makes MoneySea Limited generates revenue through its three core segments. In digital entertainment, Garena earns money by selling in-game items, battle passes, and through partnerships with other game developers for publishing rights. Shopee, the e-commerce platform, makes money through transaction fees, advertising, and logistics services provided to sellers and buyers on the platform. SeaMoney, the financial services arm, earns revenue from transaction fees, merchant services, and interest from its lending activities. The company also benefits from strategic partnerships and investments that enhance its service offerings and market reach.
Sea Financial Statement Overview
Summary
Sea demonstrates substantial growth and improving profitability, with robust cash flow generation. The company shows a balanced leverage position and has improved its return on equity significantly. While profitability margins are still relatively low, the trajectory is positive. Careful management of investments and further strengthening of equity will support continued financial health and growth.Income Statement
Sea has shown strong revenue growth, with a significant increase from $13.06 billion in 2023 to $16.82 billion in 2024. The gross profit margin improved to 42.83%, indicating better cost management. Net income rose to $444 million, enhancing the net profit margin to 2.64%. EBIT and EBITDA margins also improved, suggesting operational efficiency. However, the profitability margins are still low, presenting room for improvement.85
Very Positive
Balance Sheet
The debt-to-equity ratio is 0.49, reflecting a balanced leverage. The return on equity improved markedly to 5.30%, indicating better profitability relative to equity. The equity ratio stands at 37.01%, suggesting a moderate level of financial stability. Overall, the balance sheet shows a solid financial position but highlights the need for further strengthening of equity and asset management.78
Positive
Cash Flow
Free cash flow has grown significantly, supporting robust cash flow generation. The operating cash flow to net income ratio is 7.38, indicating strong cash conversion. The free cash flow to net income ratio stands at 7.38, reflecting efficient cash management. However, the fluctuation in investing cash flows suggests a need for careful investment planning.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 16.82B | 13.06B | 12.45B | 9.96B | 4.38B | Gross Profit |
| 7.21B | 5.83B | 5.19B | 3.90B | 1.35B | EBIT |
| 662.15M | 224.78M | -1.13B | -1.58B | -1.30B | EBITDA |
| 1.88B | 908.47M | -1.02B | -1.30B | -1.18B | Net Income Common Stockholders |
| 444.32M | 150.73M | -1.67B | -2.05B | -1.62B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 8.62B | 5.36B | 6.89B | 10.16B | 6.29B | Total Assets |
| 22.63B | 18.88B | 17.00B | 18.76B | 10.46B | Total Debt |
| 4.11B | 4.46B | 4.49B | 4.25B | 2.09B | Net Debt |
| 1.71B | 1.65B | -1.54B | -4.99B | -4.07B | Total Liabilities |
| 14.15B | 12.19B | 11.19B | 11.33B | 7.04B | Stockholders Equity |
| 8.37B | 6.59B | 5.72B | 7.40B | 3.38B |
| Cash Flow | Free Cash Flow | |||
| 3.28B | 1.82B | -2.03B | -598.53M | 219.59M | Operating Cash Flow |
| 3.28B | 2.08B | -1.06B | 208.65M | 555.87M | Investing Cash Flow |
| -5.04B | -5.80B | -2.43B | -3.77B | -886.91M | Financing Cash Flow |
| 1.68B | 366.01M | 400.26M | 7.40B | 3.73B |
Sea Technical Analysis
Positive
126.07
Price Trends
124.62
Positive
116.24
Positive
97.70
Positive
Market Momentum
0.23
Positive
48.03
Neutral
39.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE, the sentiment is Positive. The current price of 126.07 is below the 20-day moving average (MA) of 129.20, above the 50-day MA of 124.62, and above the 200-day MA of 97.70, indicating a neutral trend. The MACD of 0.23 indicates Positive momentum. The RSI at 48.03 is Neutral, neither overbought nor oversold. The STOCH value of 39.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 0 New Risks
Sea Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $319.50B | 19.00 | 11.97% | 0.72% | 4.28% | 28.42% | |
81 Outperform | $175.87B | 12.00 | 45.06% | ― | 84.13% | 122.96% | |
78 Outperform | $66.62B | 11.30 | 17.55% | 1.75% | 5.20% | 77.60% | |
78 Outperform | $72.41B | 168.72 | 5.93% | ― | 28.46% | 185.04% | |
76 Outperform | $106.22B | 55.59 | 51.50% | ― | 43.56% | 91.72% | |
59 Neutral | $12.35B | 11.02 | 1.38% | 3.72% | 1.28% | -20.23% |
* Consumer Cyclical Sector Average
Performance Comparison
SE
Sea
126.07
71.42
130.69%
MELI
Mercadolibre
2,095.27
545.20
35.17%
JD
JD
42.24
16.17
62.03%
BABA
Alibaba
135.14
65.18
93.17%
SHOP
Shopify
104.21
25.79
32.89%
PDD
PDD Holdings
126.64
6.77
5.65%
Sea Earnings Call Summary
Earnings Call Date: Mar 4, 2025 | % Change Since: 2.09% | Next Earnings Date: May 20, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance across all business segments, with record-breaking achievements in e-commerce, digital financial services, and digital entertainment. While there are some concerns about potential profitability fluctuations in Brazil and managing loan book growth risks, the overall sentiment is positive due to the significant growth and strategic achievements.Highlights
Record-Breaking E-commerce Performance
Shopee's GMV surpassed $100 billion for the first time in 2024, with over 10 billion orders and a 28% year-on-year growth. It marked the first full year of being adjusted EBITDA positive.
Digital Financial Services Growth
Sea's digital financial services segment achieved annual revenue of $2.4 billion and adjusted EBITDA of over $700 million, with a 30% year-on-year growth in both top and bottom lines.
Free Fire's Comeback
Garena's Free Fire bookings grew 34% year-on-year, making it the world's largest mobile game by average DAU in 2024, with an average DAU growth of 28% year-on-year.
Strong Financial Performance
Total GAAP revenue increased 37% year-on-year to $5 billion in Q4 2024, with a total adjusted EBITDA of $591 million compared to $127 million in Q4 2023.
Lowlights
Potential Profitability Fluctuations in Brazil
While Brazil showed strong growth and market share gains, profitability could be choppy quarter-to-quarter due to new market dynamics.
High Loan Book Growth Risks
Despite the exceptional loan book growth of more than 60% year-on-year, there is a focus on maintaining stable risk exposure, with the 90-day NPL ratio at 1.2%.
Company Guidance
In the Sea Limited Fourth Quarter and Full Year 2024 Results Conference Call, the company reported robust financial and operational performance across its three main business segments: e-commerce, digital financial services, and digital entertainment. For e-commerce, Shopee achieved a GMV of over $100 billion with a 28% year-on-year growth, recording over 10 billion orders in 2024, while maintaining positive adjusted EBITDA for the first full year. The digital financial services segment generated $2.4 billion in revenue with an adjusted EBITDA of over $700 million, driven by a 60% increase in the loan book to over $5 billion. The digital entertainment segment saw a resurgence with Free Fire's bookings growing 34% year-on-year, making it the world's largest mobile game by average DAU in 2024. Overall, Sea Limited's total GAAP revenue rose 29% year-on-year to $16.8 billion, with a full-year adjusted EBITDA of $2 billion, up from $1.2 billion in 2023. The company also highlighted improvements in service quality and operational efficiencies, notably through AI integration, which contributed to increased customer satisfaction and reduced costs. Looking ahead, Sea Limited anticipates continued growth and profitability in 2025, with Shopee's GMV expected to grow by 20% and Garena projected to maintain double-digit growth in both user base and bookings.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.