SEA LTD-ADR (NYSE:SE) – A Compelling Growth Stock at a Reasonable Valuation

SEA LTD-ADR (NYSE:SE) was identified as an affordable growth stock by our stock screener. The company, which operates across e-commerce, digital financial services, and digital entertainment, shows strong growth potential while maintaining reasonable valuation metrics. Its financial health and profitability are solid, making it an interesting candidate for investors seeking growth at a sensible price.

Growth Prospects

SEA LTD has demonstrated impressive growth, with key highlights including:

• Revenue Growth: Revenue increased by 30.31% over the past year, with an average annual growth rate of 50.55% over multiple years.
• Earnings Expansion: Earnings per share (EPS) surged by 2,740% in the last year, reflecting strong operational improvements.
• Future Expectations: Analysts project EPS growth of 100.20% annually in the coming years, alongside expected revenue growth of 16.90%.

These metrics indicate that SEA LTD is not only expanding rapidly but is also expected to sustain above-average growth.

Valuation Assessment

While the stock trades at a high P/E ratio of 106.42, it remains cheaper than 65.28% of its industry peers. Other valuation points include:

• Forward P/E of 32.55, below the industry average.
• Attractive PEG Ratio, suggesting the stock is reasonably priced relative to its growth prospects.
• Price/Free Cash Flow is more favorable than 68.06% of competitors.

Though not deeply undervalued, SEA LTD’s valuation appears justified given its growth trajectory.

Financial Health & Profitability

The company scores well on financial stability, with:

• Strong Solvency: A healthy Altman-Z score of 4.40, indicating low bankruptcy risk.
• Manageable Debt: A debt-to-equity ratio of 0.68, in line with industry norms.
• Positive Cash Flow: Consistent operating cash flow generation over recent years.

Profitability is improving, with:

• Return on Equity (ROE) of 5.31%, better than 75% of peers.
• Operating Margin of 3.94%, outperforming 68.06% of competitors.

While profitability is not yet exceptional, the upward trend is encouraging.

For a deeper look, review the full fundamental analysis of SEA LTD.

Our Affordable Growth screener lists more stocks with strong growth and reasonable valuations, updated daily.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should conduct your own analysis before making investment decisions.