Sea Ltd (SE, Financial) has experienced a remarkable surge in its stock price, with a 13.39% gain over the past week and an impressive 36.21% gain over the past three months. The company's market capitalization now stands at $32.34 billion, with a current price of $56.86 per share. According to the GF Value, which is set at $98.96, Sea Ltd is currently significantly undervalued. This is a notable shift from the past GF Value of $96.74, where the stock was considered a possible value trap, suggesting investors should think twice before investing. The recent price changes and GF Value assessments indicate a positive outlook for Sea Ltd's stock, attracting the attention of value investors.
Introduction to Sea Ltd
Sea Ltd, operating in the retail-cyclical industry, is the largest e-commerce company in Southeast Asia. It boasts a significant presence in gaming and digital financial services. Sea's e-commerce platform, Shopee, leads the market in gross merchandise value and transactions. The company's gaming division, Garena, has seen success with Free Fire, the most downloaded game in January 2022. SeaMoney, the company's financial services arm, focuses on credit lending. With a diverse portfolio and a strong foothold in multiple sectors, Sea Ltd is well-positioned for continued growth.
Assessing Sea Ltd's Profitability
Sea Ltd's Profitability Rank stands at 4/10, indicating moderate profitability within its industry. The company's Operating Margin is 7.13%, which is better than 67.72% of companies in the same sector. Additionally, Sea Ltd's ROE (Return on Equity) is 11.66%, and its ROA (Return on Assets) is 3.97%, both of which are above the median for their respective categories. The company's ROIC (Return on Invested Capital) is 10.80%, indicating efficient use of capital. These figures suggest that Sea Ltd is maintaining a competitive edge in profitability compared to its peers.
Growth Trajectory of Sea Ltd
Sea Ltd's Growth Rank is an impressive 9/10, reflecting its strong performance in revenue and profitability growth. The company's 3-Year Revenue Growth Rate per Share is 64.80%, and its 5-Year Revenue Growth Rate per Share is 70.80%, both significantly higher than the majority of its industry peers. The estimated Total Revenue Growth Rate for the next 3 to 5 years is 9.86%, indicating a positive outlook for future earnings. Sea Ltd's 3-Year EPS without NRI Growth Rate is 11.80%, further demonstrating the company's capacity for sustained growth.
Investor Confidence in Sea Ltd
Notable investors have shown confidence in Sea Ltd's potential. Baillie Gifford (Trades, Portfolio) holds 34,183,394 shares, representing a 6.01% stake in the company. Chase Coleman (Trades, Portfolio) owns 14,320,168 shares, accounting for 2.52%, and Frank Sands (Trades, Portfolio) has invested in 7,348,797 shares, making up 1.29% of Sea Ltd's shares. These holdings reflect a strong belief in the company's strategy and future prospects among seasoned investors.
Competitive Landscape
Sea Ltd operates in a competitive retail-cyclical industry, with key players such as eBay Inc (EBAY, Financial) with a market cap of $25.3 billion, Coupang Inc (CPNG, Financial) valued at $33.84 billion, and Chewy Inc (CHWY, Financial) at $7.66 billion. Despite the competition, Sea Ltd's diversified business model and strong growth metrics position it favorably against these industry counterparts.
Conclusion
In conclusion, Sea Ltd's recent stock performance, profitability, and growth potential paint a promising picture for the company. With a significant undervaluation according to the GF Value, a robust profitability rank, and an exceptional growth rank, Sea Ltd stands out as a compelling investment opportunity in the retail-cyclical industry. The company's competitive standing, backed by the confidence of major investors, further solidifies its position as a strong contender in the market. As Sea Ltd continues to expand its reach and diversify its offerings, it remains an attractive stock for value investors looking for growth and stability.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
