Meet the Spectacular Growth Stock I Just Bought During the Stock Market Sell-Off

The benchmark S&P 500 index is off to a rocky start to 2026, having lost around 5% of its peak value. With geopolitical tensions and economic uncertainty on the rise, this sell-off could morph into a correction of 10% or more. But throughout history, the S&P 500 has always recovered to new record highs over the long term, so dips usually represent buying opportunities for investors.

For that reason, I bought Sea Limited (NYSE: SE) stock earlier this month. It's a Singapore-based technology powerhouse operating three core businesses in the e-commerce, gaming, and digital financial services segments. Its stock has heavily underperformed the market lately, declining by a whopping 56% from its 52-week high.

But I think it's a solid buy based on its extremely attractive valuation, and the company's rapid financial growth.

Image source: Getty Images.

A triple threat in the digital economy

Sea owns Shopee, which is the largest e-commerce platform in Southeast Asia. It processed 13.9 billion orders worth $127.4 billion during 2025, and both numbers were record highs. Sea is squeezing more revenue out of Shopee over time by selling digital ads on the platform. It's also improving its logistics network to deliver products to customers much faster, which in turn leads to more orders.

Then there is Sea's digital financial services platform, Monee. It lends money to Shopee merchants to help them grow their business, and it also offers buy now, pay later loans to consumers to supercharge their purchasing power. Monee had 37 million active borrowers at the end of 2025, growth of 40% year over year. They held $9.2 billion in loans, which was up by a whopping 80%.

Sea's third and final business segment is digital entertainment, which is home to the company's Garena game development studio. Garena is responsible for some of the world's most popular mobile games, including Free Fire, Call of Duty: Mobile, and EA Sports FC. The studio served over 633 million users during the fourth quarter of 2025, which was a modest increase from the same period in 2024.

Sea's revenue growth is accelerating

Sea generated a record $22.9 billion in total revenue during 2025, representing a 36.4% year-over-year increase. That growth rate accelerated for the second straight year, which highlights the company's incredible momentum. Here's how its 2025 revenue was broken down.

Data source: Sea Limited.

Although the e-commerce business is clearly Sea's largest source of revenue, it operates on very thin profit margins because it aims to give customers the lowest possible prices. But it made progress in 2025, with $880.6 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), which is Sea's preferred measure of profitability. That was up by a whopping 465% compared to 2024.

With that said, the digital financial services and digital entertainment segments generated a combined $2.7 billion in adjusted EBITDA for the year on significantly less revenue. This is the benefit of operating such a diversified group of businesses.

Overall, Sea had a massive year at the bottom line, even on a generally accepted accounting principles (GAAP) basis. The company delivered $1.6 billion in net income, which was up by 259% compared to 2024.

Sea stock looks cheap right now

Following the 56% decline from its 52-week high, Sea stock is trading at a very attractive valuation. Its price-to-sales (P/S) ratio is just 2.3, which is a significant discount to its long-term average of 8.7, dating back to when the stock went public in 2017. Moreover, Wall Street's consensus estimate (provided by Yahoo! Finance) suggests that Sea could grow its revenue to $28.9 billion during 2026, placing its stock at a forward P/S ratio of just 1.7.

SE PS Ratio data by YCharts.

That means Sea stock would have to soar by almost 400% by the end of 2026 just to trade in line with its long-term average P/S ratio of 8.7. I'm not suggesting that will happen, but I think there is clearly room for upside from here.

Finally, one of the other reasons I invested in Sea is its incredibly strong balance sheet. The company ended 2025 with $11.1 billion in cash and equivalents on hand against just $510 million in debt, so it has a substantial amount of resources at its disposal. That cash position is improving because of Sea's surging profits, so there is nothing stopping management from investing aggressively in growth from here.

Anthony Di Pizio has positions in Sea Limited. The Motley Fool has positions in and recommends Sea Limited. The Motley Fool has a disclosure policy.