GrowthTurtle
Data Science PhD & IEEE Fellow, Ex-Two Sigma
Sea Limited is cheap against its cash earnings, trading about 14% below the low end of fair value. It sits at 21x cash earnings and 15x next year's, while retailers usually get 20x; 20x next year's cash earnings, give or take 12%, implies $110.13-140.16. The valuation leans on the forecast, with forward earnings 36% above trailing, and the stock becomes expensive above $135.52. This is a valuation read only, based on reported earnings and estimates. x.comÂ
Sea looks cheap because EBITDA is likely to grow at 25% or more annually for the next few years while it trades at 9x 2027 EV/EBITDA. Sea Cloud should have launched years ago, when raising capital was easier and cheaper; ramping capex now means free cash flow disappears for the next 3-5 years. x.com x.comÂ
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.comÂ
Sea looks super interesting at 18x forward EPS against 30%+ EPS CAGR for 2027-2028. Past periods of heavy investment worked well for Sea, making market punishment for new investment exciting. Cloud-entry capex and limited communication, fierce competition, and uncertainty around the fintech IPO remain concerns. x.com x.comÂ
Sea Limited looks strikingly cheap at under 8 times next-twelve-month enterprise value to EBITDA. x.comÂ
The market's worst-case assumptions about Sea Limited's still-unclear Monee IPO and Sea Cloud look like a classic overreaction. Around $75, Sea looks very attractive: not much needs to go right for the investment to work, anything better than the worst case becomes an opportunity, and upside is enormous if things go right. x.comÂ
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 has upside potential if management can lift net margin from 5% to 25% over the next three years; with revenue growth maintained, that could mean 10x higher EPS, while the stock trades at 36 times earnings. x.comÂ
Sea Limited's revenue growth has far outpaced its market value, making the shares interesting at these levels. Revenue is up 150% since Q1 2022 while market cap is down 25%; a multibagger is possible. x.com x.com x.comÂ
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 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.comÂ
