Sea: Investment Case Delayed, Not Derailed (Upgrade To Strong Buy)

Ricardo Fernandez3.4K FollowersFollow5ShareSavePlay(6min)Comment(1)SummarySea Limited is upgraded to Strong Buy with a YE26 price target of $136, reflecting undervaluation after a sharp selloff.Despite e-commerce margin pressures and flat 2026 EBITDA guidance, consolidated forward earnings growth remains above 20%, supported by resilient gaming and fintech segments.SE maintains positive free cash flow and over $11 billion in net cash, benefiting from an asset-light, positive working capital model.Valuation multiples have compressed to 0.6x PEG or 15x P/CE, offering an attractive entry point given above-average growth and solid cash generation.maybefalse/iStock Unreleased via Getty Images Introduction Things have gotten tough for Sea (SE), impacted by a highly competitive e-commerce environment across most of its markets (Southeast Asia and Latin America) due in part as a repercussion of the end of theThis article was written byRicardo Fernandez3.4K FollowersFollowI have more that 35 years of experience in the investment field having worked as a sell & buy side analyst and portfolio manger for debt and equity funds. I am currently managing a high yield Latam bond fund.My goal, as a Seeking Alpha contributor, is to provide a fundamental view and analysis of companies and funds in a streamlined version of institutional research. The operating and financial forecast, whether my own or based on consensus, drives the valuation and ultimate rating. I like numbers (financial statements) and use words to explain there meaning and potential consequences.For the most part, my selection choices reflect what I believe can offer long term potential and I frequently take positions in many ideas for my personal account.Analyst’s Disclosure: I/we have a beneficial long position in the shares of SE, CPNG, MELI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.