Sea has gotten torched over the last six months - since November 2025, its stock price has dropped 44.9% to $86.28 per share. This may have investors wondering how to approach the situation.
Following the pullback, is now an opportune time to buy SE? Find out in our full research report, it’s free.
Why Is Sea a Good Business?
Founded in 2009 and a publicly traded company since 2017, Sea (NYSE:SE) started as a gaming platform and has since expanded to offer a variety of services such as e-commerce, digital payments, and financial services across Southeast Asia.
1. Paying Users Skyrocket, Fueling Growth Opportunities
As an online marketplace, Sea generates revenue growth by increasing both the number of users on its platform and the average order size in dollars.
Over the last two years, Sea’s paying users, a key performance metric for the company, increased by 24.9% annually to 58 million in the latest quarter. This growth rate is among the fastest of any consumer internet business and indicates its offerings have significant traction.
2. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Sea’s full-year EPS flipped from negative to positive over the last three years. This is a good sign and shows it’s at an inflection point.
3. Increasing Free Cash Flow Margin Juices Financials
Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
As you can see below, Sea’s margin expanded by 30.7 percentage points over the last few years. This is encouraging, and we can see it became a less capital-intensive business because its free cash flow profitability rose more than its operating profitability. Sea’s free cash flow margin for the trailing 12 months was 21.4%.
Final Judgment
These are just a few reasons why we're bullish on Sea. With the recent decline, the stock trades at 13× forward EV/EBITDA (or $86.28 per share). Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
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