SEA LTD-ADR (NYSE:SE) – A Strong Growth Stock with Breakout Potential

Identifying Strong Growth Stocks with Breakout Potential: A Look at SEA LTD-ADR (NYSE:SE)

The strategy of combining strong fundamental growth metrics with favorable technical breakout patterns is a proven way to find stocks with notable upside. This approach uses both fundamental and technical analysis: fundamental analysis checks the company’s financial health, profitability, and growth potential, while technical analysis helps find the best times to buy by spotting trends or patterns that often lead to breakouts. SEA LTD-ADR (NYSE:SE) recently appeared in such a scan, showing strong traits in both areas.

Fundamental Strengths Supporting Growth

SEA LTD-ADR operates in three fast-growing sectors: e-commerce (Shopee), digital financial services (SeaMoney), and digital entertainment (Garena), making it a key player in Southeast Asia’s growing digital economy. The company’s fundamental analysis report points to several important strengths:

• Strong Growth Metrics: Over the past year, SE reported a remarkable 2,740% EPS growth and 30.31% revenue growth, with a 5-year average revenue growth of 50.55%. Future estimates predict ongoing progress, with EPS expected to grow at 100.20% annually. These numbers rank SE among the top growth stocks in its industry.
• Healthy Financial Position: With a ChartMill Health Rating of 7/10, SE has a solid balance sheet. Its Altman-Z score of 4.57 and manageable debt-to-equity ratio (0.68) suggest low bankruptcy risk and careful borrowing. Liquidity metrics (current ratio of 1.49) further highlight its ability to cover short-term needs.
• Fair Valuation for Growth: While SE’s P/E ratio of 111.06 seems high, its PEG ratio (factoring in growth) indicates the stock is fairly priced relative to its earnings path. The company trades at a lower P/E than 62.5% of its entertainment industry peers.

These fundamentals match the criteria in our growth investing introduction, stressing the need for scalable markets, competitive edges, and strong leadership—all of which SE shows through its regional strength and varied business model.

Technical Setup Signaling Breakout Potential

SE’s technical analysis report shows a stock trading near the top of its 52-week range, with a 9/10 technical rating and a 7/10 setup score. Key points include:

• Clear Long-Term Uptrend: SE’s price stays in a steady upward trend, backed by rising SMAs (50-day, 100-day, and 200-day). The stock has beaten 95% of all stocks over the past year, with a 141% 12-month return.
• Trading Near Resistance: SE has moved between $145.24 and $170.00 over the last month, with a key resistance area at $168.56–$170.41. A move above this level could signal more upward movement.
• Support Levels for Risk Control: Multiple support zones (e.g., $154.93–$155.49 and $148.25) offer clear stop-loss points, capping potential losses to ~2.6% if the trade doesn’t work out.

The mix of strong growth and a solid technical setup makes SE an attractive choice for investors looking for stocks with further upside.

Why This Screen Works

This strategy focuses on stocks where strong fundamentals confirm the technical breakout, lowering the chance of false signals. SE fits this well: its rapid growth supports the price rise, while the technical setup provides a structured entry. As noted in our fundamental analysis guide, combining numbers with qualitative factors (like market position and industry trends) ensures a full evaluation.

For investors searching for similar opportunities, check out more stocks filtered by this method using our Strong Growth Stocks with Good Technical Setup Ratings screen.

Disclaimer: This article is not investment advice. Always conduct your own research or consult a financial advisor before making investment decisions.