Mitchell Martan
Investment Researcher for The Long Investor, Economics/Finance Background
Sea Limited is a $200 company trading at $130 after a quarter whose growth was the better, higher-margin kind. Shopee revenue rose 48.2%, with core marketplace fee and ad revenue up 65.6% while logistics revenue fell 9%, meaning less shipping-subsidy drag. Monee revenue grew 58.9% as its loan book rose 62.5% to $11.1 billion with 90+ day NPLs flat at 1.0%, and Garena remains a cash machine. Margins compressed on reinvestment while buybacks continued. x.com x.com
Sea Limited's very strong quarter is not yet fully rewarded, and the stock should get back above $100. All three businesses performed well at once: Shopee kept growing fast with better ad and transaction-fee monetization, Monee loans grew 71% with non-performing loans at just 1.1%, and Garena had its best quarter in years on Free Fire. Revenue grew 46.6% with over $1B in adjusted EBITDA, a rare mix of growth investment and high profitability, and strength should continue through the quarter. x.com x.com x.com x.com
Sea could unlock value from its existing fintech and cloud assets, making the selloff look ridiculous. Forrest Li's memo says Monee could stand on its own; a separate listing could give it a valuation and growth capital, though no date or terms are set. Sea Cloud would sell infrastructure already used for Shopee and Garena, not build from scratch. Last-quarter revenue was $7.79B, up almost 50% year over year, against an 18-19 forward P/E. x.com x.com
Sea Limited looks too cheap at under 22 times 2027 earnings estimates, with those earnings expected to grow 35.6% while the business is still far from optimized for earnings. Revenue rose 48% with stable margins, and all three growth engines are moving in the right direction. x.com x.com
Sea Limited's threat from TikTok Shop is understated, because TikTok is a social network that added a shop, creating purchase interest from scratch, while Shopee is a shopping app trying to act social. Video reviews and seconds-long checkout make buying a natural part of scrolling, and Shopee Live cannot easily copy that. Southeast Asian e-commerce may end as a duopoly with two winners, but without a clear monopoly Sea is a less ideal investment than businesses such as Axon. x.com x.com
Sea Limited's main attraction is a valuation well below its historical medians despite accelerating growth, at 23.2x forward earnings and 12.5x forward EV/EBITDA. All three segments are now profitable. Shopee revenue growth accelerated five straight quarters to 48.2% in Q2, lifting its take rate to a record 14.6%, and Garena grew 33.5% at a 54% operating margin. Per Magpie IQ, TikTok Shop's tracked Indonesian GMV fell about 4% in January-May. Monee's credit quality is the key risk to watch. … Show more
Sea Limited has three amazing businesses in Shopee, Monee and Garena, making it one of the top five picks. Shopee brings the most revenue, then Monee and Garena, but gaming is the highest-margin unit and contributes most to the bottom line. x.com
Sea, MercadoLibre, Nike and Lululemon have potential but are not buys until a confirmed uptrend forms. A good company is not necessarily a great stock, and a downtrend does not reverse on one earnings beat and a few green weeks. Sea gave back all its post-earnings gains as traders took swings, shorts covered and funds bought, showing it had not bottomed. Investors should hold names already trending, with clear higher highs, and keep these on a watchlist. x.com
Sea looks inexpensive at 7.7x EBITDA with 48% revenue growth, against eBay at 15x and 14%. Sea Cloud may resemble early self-funded AWS rather than a debt-heavy neocloud: Sea has $7B net cash, a 10% free-cash-flow yield, 25,000 GPUs for its core business and, it says, 500 staff already on the project. DBS models startup losses, but those are its assumptions. The upside depends on cloud spending not becoming a massive undertaking; earnings clarity on that spending matters. x.com x.com x.com x.com … Show more
Sea Limited's sum-of-the-parts discount is compressing as Shopee's scale economics improve, supporting an Overweight rating and a $168 December 2026 target. Shopee's negative working capital funds its own growth, scale lowers fulfillment costs, advertising is in early innings, and its competitive position has stabilized. Garena carries single-title risk but generates cash, and Monee is underpriced optionality. The target values Garena at 13x earnings, Shopee at 20x EV/EBITDA and Monee at 15x. … Show more
Coupang, Sea and MercadoLibre remain dead money: their charts are broken, they are still overvalued and they face too much competition. Even after recent gains in Sea, they could stay dead money from here; they might be value, but that won't be known for a couple of years, and value traps are a devastating source of capital impairment. x.com x.com
Sea Limited's cash generation and sales have risen sharply while its share price is back at its 2020 level. Annual free cash flow moved from negative $100 million to $4.5 billion and revenue from $2.6 billion to $22.9 billion; at $74 versus a Street consensus target above $150, it is a strong buy and undervalued. x.com x.com
