SEA LTD-ADR (NYSE:SE): A Prime Affordable Growth Stock with Strong Fundamentals

Investors looking for growth opportunities at fair prices often consider the "Affordable Growth" strategy, which focuses on companies with high growth potential, stable finances, and profitability, all while steering clear of expensive stocks. This method balances the search for fast-growing businesses with careful valuation checks, lowering the chance of paying too much for future earnings. One stock that meets these standards is SEA LTD-ADR (NYSE:SE), a Singapore-based internet and mobile platform firm active in e-commerce, digital financial services, and digital entertainment.

Growth: A Major Factor for SEA LTD-ADR

The company’s growth numbers are notable, receiving a ChartMill Growth Rating of 7/10. Over the last year, SEA LTD-ADR has shown strong earnings growth, with EPS rising by 2,740%, while revenue grew by 30.31%. In the past, the company has kept an outstanding 50.55% average yearly revenue growth rate. Analysts predict this trend will continue, with expected EPS growth of 100.20% and revenue growth of 16.90% per year. These numbers indicate that SEA LTD-ADR is not only growing quickly but is also likely to maintain this pace, a key point for growth-focused investors.

Valuation: Weighing Growth and Cost

Even with its strong growth, SEA LTD-ADR’s valuation stays fair, scoring 5/10 in ChartMill’s Valuation Rating. While its P/E ratio of 110.38 might seem high initially, it is actually lower than 64.38% of its peers in the entertainment sector. More importantly, its forward P/E of 33.76 is below the industry average and close to the S&P 500’s forward P/E of 36.42. The company’s low PEG ratio, which factors in earnings growth, shows its valuation is reasonable given its expected expansion. This makes SEA LTD-ADR a good choice for investors who want growth without overpaying.

Financial Health and Profitability: Supporting Long-Term Growth

A company’s ability to maintain growth depends on its financial strength and profitability. SEA LTD-ADR scores 7/10 in Financial Health, with a solid Altman-Z score of 4.54, signaling low bankruptcy risk. Its debt-to-FCF ratio of 1.93 means it can pay off debt faster than 78.08% of its competitors. While profitability is moderate (5/10), key measures like Return on Equity (5.31%) and Operating Margin (3.94%) are in line with industry standards. The company’s rising gross margins also highlight its ability to grow efficiently.

Why These Numbers Matter for Affordable Growth Investing

The Affordable Growth strategy looks for companies that offer strong growth at fair prices, helping investors avoid overly risky bets. SEA LTD-ADR fits this approach by showing steady revenue and earnings growth while keeping valuations grounded. Its solid financial health reduces risk, and improving profitability suggests it can turn growth into lasting earnings.

For a closer look at SEA LTD-ADR’s fundamentals, check the full fundamental analysis report here.

Find More Affordable Growth Stocks

SEA LTD-ADR is just one example of a stock that fits the Affordable Growth criteria. Investors searching for similar opportunities can explore other options using our Affordable Growth Stock Screener.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult a financial advisor before making any investment decisions.