Sea Limited Rises 46% Year to Date: Buy, Sell or Hold the Stock?

Sea Limited SE shares have jumped 45.5% year to date (YTD), outperforming the Zacks Internet Software industry’s appreciation of 10.6% and the Zacks Computer and Technology sector’s rise of 1.1%. The company is benefiting from strong growth across segments, including Shopee (e-commerce), Monee (digital financial services, earlier known as SeaMoney) and Garena (digital entertainment).YTD, Sea Limited shares have outperformed its closest peers, NetEase NTES, Alibaba BABA and JD.com JD. Sea Limited’s Garena competes with NetEase while Alibaba and JD.com are notable competitors in the e-commerce segment. Shares of NetEase and Alibaba have appreciated 45% and 33.1%, respectively, while JD.com has dropped 5.6% YTD.SE Stock’s Performance Image Source: Zacks Investment Research The stock is currently trading above the 50-day and the 200-day moving averages, indicating a bullish trend.SE Stock Trades Above the 50-Day & 200-Day SMAs Image Source: Zacks Investment Research So, Buy, Sell or Hold Sea Limited stock? Let’s analyze.SE Rides on Strong Shopee PerformanceSea Limited is benefiting from strong performance across all three of its businesses. In first-quarter 2025, Shopee revenues soared 28.3% year over year to $3.5 billion, with ad revenues growing more than 50% year over year. Shopee delivered a record-high gross merchandise volume (GMV) of $28.6 billion, up 21.5% year over year, while gross orders jumped 20.5% year over year to $3.1 billion. Adjusted EBITDA reached $264.4 million from a year-ago quarter loss of 21.7 million, driven by higher take rates, cost optimization and competitive pricing. The company saw improved profitability across both Asia and Brazil, driven by continued scale expansion, cost optimization, and enhanced monetization. Shopee remains on track to meet its 20% full-year GMV growth target with improving profitability. Sea Limited’s diverse product range and competitive pricing are helping it win buyers.Shopee is benefiting close relationship with sellers and deeper integration with upstream suppliers. In first-quarter 2025, Sea Limited reduced Shopee’s overall logistics cost-per-order by 6% in Asia and 21% in Brazil year over year, while continuing to improve delivery times and expand network coverage. Initiatives like instant delivery options in Indonesia’s major cities, Shopee VIP membership program (1 million subscribers at the end of March), Shopee AI assistant and upgraded ad-tech product GMV Max are expected to drive Shopee’s growth in the long term.Solid Monee and Garena Improve SE’s ProspectsMonee revenues surged 57.1% year over year to $787.1 million. Monee is one of the largest unsecured consumer lending businesses in Southeast Asia. Expansion into Brazil is a key catalyst. Sea Limited continues to innovate with Monee expanding beyond payments and credit to banking, investment, and insurance. This bodes well for its prospects.Garena revenues were $495.6 million, up 8.2% year over year.  Bookings soared 51.4% year over year to $775.4 million, driven by the success of its flagship game, Free Fire. Average bookings per user were $1.17 compared to 86 cents for the first quarter of 2024. Garena’s collaboration with Naruto Shippuden contributed to increased user engagement. While quarterly active users increased 11.3% year over year to 661.8 million, quarterly paying users were 64.6 million, up 32.2% year over year. Paying user ratio was 9.8% compared with 8.2% for the first quarter of 2024. Adjusted EBITDA was $458.2 million, up 56.8% year over year. Expanding gaming portfolio benefits Garena. In April, Sea published Delta Force Mobile, a first-person tactical shooting game, across markets in Southeast Asia, MENA, and Latin America that attracted more than 10 million downloads. The launch of Free City is also noteworthy. The company remains on track to achieve double-digit growth for Garena’s user base and bookings in 2025.Earnings Estimate Revision for SE Trends UpwardThe Zacks Consensus Estimate for SE’s second-quarter 2025 is pegged at $1.03 per share, which increased a couple of cents over the past 30 days. The estimate indicates a 123.91% upsurge from the figure reported in the year-ago quarter.The consensus mark for 2025 earnings is pegged at $4.23 per share, up 2.2% over the past 30 days. The estimate indicates a 151.79% jump from 2024’s reported figure. Sea Limited Sponsored ADR Price and Consensus Sea Limited Sponsored ADR price-consensus-chart | Sea Limited Sponsored ADR Quote SE Stock Trades at a PremiumSea Limited shares are overvalued, as suggested by a Value Score of D. SEA stock is trading at a significant premium with a forward 12-month Price/Book (P/B) of 10.02X compared with the industry’s 6.26X.Price/Book Ratio Image Source: Zacks Investment Research SE shares are trading at a premium compared with NetEase, Alibaba and JD.com, shares of which are trading at 4.03X, 1.81X and 1.22X, respectively.Here is why SE Stock is a Hold NowAlthough Sea Limited is benefiting from an expanding Shopee, Monee and Garena businesses, stiff competition in Asia and Brazil is a concern. The launch of TikTok Shop in Brazil in May 2025 introduced a formidable competitor for SE in the e-commerce landscape. In Brazil, Shopee Live faces slow uptake due to early-stage market conditions. Shopee Live is struggling to grow in Brazil due to limited awareness of live shopping and a lack of local content creators. Sea Limited is expected to invest in building this ecosystem, which can affect profitability in the near term. This, along with a stretched valuation, is a concern for Sea Limited investors.Sea Limited currently has a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point to start accumulating the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.5% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sea Limited Sponsored ADR (SE): Free Stock Analysis Report NetEase, Inc. (NTES): Free Stock Analysis Report JD.com, Inc. (JD): Free Stock Analysis Report Alibaba Group Holding Limited (BABA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks