Meet the Monster Stock That Continues to Crush the Market

Key Points

• Sea Limited has prospered by leading the way in three different segments of tech.

• Strategic missteps and struggles in its gaming segment weighed on the stock.

• The company is making a comeback as all three of its business segments return to growth.

• 10 stocks we like better than Sea Limited ›

As the largest e-commerce and fintech company in Southeast Asia, Sea Limited (NYSE: SE) may not be on the radar of most U.S. investors. That's understandable, as most of its business takes place in seven Southeast Asian countries and Brazil. Even though investors may know its popular mobile game Free Fire, they may not associate it with this company.

That could change as they become aware of the stock's 130% price gain over the last year. With the struggles of two of its business segments mostly behind the company, it might be a good time to consider buying Sea Limited shares as it continues to move higher.

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Image source: Getty Images.

What is Sea Limited?

Sea Limited is a tech conglomerate made up of three business segments. Its original business, gaming company Garena, develops online games and organizes and hosts esports events. Although most of its business takes place in Southeast Asia, its games are available worldwide.

Its two other segments, e-commerce company Shopee and fintech enterprise Monee, work in conjunction with one another and separately. Shopee is the leading e-commerce company in Southeast Asia, while Monee is a major player in Southeast Asian fintech. Along with helping customers buy on Shopee, Monee provides mobile wallet, payment processing, credit, banking, and Insurtech services in Shopee's major markets.

These three businesses drove massive stock gains during the pandemic's height. Although Monee's business has remained solid, the pandemic's wind-down contributed to the failure of Shopee's European and Latin American expansion efforts. Consequently, it mostly pulled out of all of these markets, except for Brazil. Shopee has since taken cues from Amazon and MercadoLibre, investing in logistics to bolster its competitive advantage.

The end of the pandemic's height also led to fewer people playing Garena games, and a ban on Free Fire in India worsened its slump. Fortunately, the company has revived the popularity of Free Fire, particularly in India, where the country's government recently lifted the ban on Free Fire. Consequently, the Garena segment has returned to growth.

Sea Limited's financials

Now that all three segments are back in growth mode, the company's financials and stock are moving in the right direction.

In the first half of 2024, revenue of $10 billion grew by 34% compared to the same period last year. In comparison, expenses rose 24%. That led to a net income attributable to shareholders of $809 million in the first two quarters of 2025, up from just $58 million for the year-ago period.

The company did not mention explicit revenue guidance, though analysts forecast 29% revenue growth for 2025, indicating a modest growth slowdown if the company meets those expectations.

Admittedly, its struggles are not entirely over. When compared to its closing high of around $367 per share in October 2021, Sea Limited still sells at a 52% discount to its all-time high.

Failure to turn a profit in prior quarters also led to no trailing price-to-earnings (P/E) ratio. Still, investors may perceive its 45 forward P/E ratio as reasonable considering the company's robust revenue growth and rising profits. Ultimately, such conditions indicate that Sea Limited could stay on a growth path for years to come.

Sea Limited is not done growing

Despite considerable gains over the last year, Sea Limited's stock should continue to move higher.

Indeed, the company's pandemic missteps and the corresponding stock price decline may deter investors. Nonetheless, Sea Limited's strategic pivots indicate it has learned from its past mistakes. As a result, the stock is again showing how it can rise when all three segments perform well.

As the company's games expand their reach and cement its e-commerce and fintech leadership in Southeast Asia, the stock should remain on a long-term growth trajectory for a long time to come.

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Will Healy has positions in MercadoLibre and Sea Limited. The Motley Fool has positions in and recommends Amazon, MercadoLibre, and Sea Limited. The Motley Fool has a disclosure policy.