Sea: Priced For Deterioration That Hasn't Arrived
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The Alpha Analyst2.6K FollowersFollow5ShareSavePlay(9min)CommentsSummarySea Limited offers a compelling long-term Buy opportunity after a major price correction, with current valuation discounting significant deterioration.Shopee's e-commerce segment shows robust ~35% revenue growth and positive adjusted EBITDA, but faces intense competition and limited near-term margin expansion.Digital financial services deliver ~61% YoY growth and high ~87% gross margins, yet future net margin gains are capped by credit and regulatory risks.My DCF model, using conservative margins and realistic growth, indicates material upside potential even without further cash flow improvements.
Images By Tang Ming Tung/DigitalVision via Getty Images A DCF I constructed using realistically bullish assumptions (continuing current trends) around each segment of Sea Limited (SE) shows that current prices do not fully reflect the durability of currentThis article was written byThe Alpha Analyst2.6K FollowersFollowI am a stock analyst with over 20 years of experience in quantitative research, financial modeling, and risk management. My focus is on equity valuation, market trends, and portfolio optimization to uncover high-growth investment opportunities. As a former Vice President at Barclays, I led teams in model validation, stress testing, and regulatory finance, developing a deep expertise in both fundamental and technical analysis. Alongside my research partner (also my wife), I co-author investment research, combining our complementary strengths to deliver high-quality, data-driven insights. Our approach blends rigorous risk management with a long-term perspective on value creation. We have a particular interest in macroeconomic trends, corporate earnings, and financial statement analysis, aiming to provide actionable ideas for investors seeking to outperform the market.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.