Sea Ltd (SE, Financial) has experienced a notable fluctuation in its stock price over recent periods. With a current market capitalization of $32.09 billion, the stock is trading at $56.42. Over the past week, Sea Ltd's shares have seen a 4.36% decline, yet this short-term loss is overshadowed by a significant 52.67% gain over the past three months. According to GF Value, the stock is currently significantly undervalued at $89.31, compared to a past GF Value of $97.66. This marks a shift from a previous assessment of being a possible value trap to a more favorable investment opportunity.
Introduction to Sea Ltd
Sea Ltd, a titan in the Retail - Cyclical industry, operates Shopee, Southeast Asia's largest e-commerce platform by gross merchandise value and transactions. Originating as a gaming company with Garena, Sea Ltd expanded into e-commerce in 2015, which has since become its primary growth engine. Shopee's hybrid model serves various core markets, with Indonesia being a significant contributor to its GMV. Garena's Free Fire continues to be a top-performing game, while SeaMoney, the company's financial services arm, is expanding its credit lending services. 
Assessing Sea Ltd's Profitability
Sea Ltd's Profitability Rank stands at 4/10, reflecting moderate performance within its sector. The company's operating margin is 2.62%, surpassing 44.17% of 1,107 companies in the industry. Its return on equity (ROE) is 2.48%, higher than 39.72% of its peers, while the return on assets (ROA) at 0.88% and return on invested capital (ROIC) at 1.81% both exceed the performance of 40.9% of 1,115 companies. However, Sea Ltd has only achieved profitability in one of the past ten years, which is a concern when compared to 1045 companies. 
Sea Ltd's Growth Trajectory
The company's Growth Rank is an impressive 9/10. Sea Ltd has demonstrated robust growth, with a 3-year revenue growth rate per share of 33.80%, outperforming 91.07% of 1,042 companies. Its 5-year revenue growth rate per share is even more remarkable at 58.80%, better than 97.95% of 927 companies. Looking ahead, the estimated total revenue growth rate for the next 3 to 5 years is 10.25%, which is superior to 79.56% of 318 companies. The EPS without NRI growth rate for the same future period is projected at 37.03%, surpassing 91.87% of 123 companies. 
Notable Shareholders in Sea Ltd
Sea Ltd has attracted the attention of prominent investors. Baillie Gifford (Trades, Portfolio) holds the largest share with 34,183,394 shares, accounting for 6.01% of the company. Chase Coleman (Trades, Portfolio) follows with 14,320,168 shares, representing 2.52%, and Frank Sands (Trades, Portfolio) holds 7,348,797 shares, making up 1.29% of Sea Ltd's shares.
Competitive Landscape
When compared to its competitors, Sea Ltd holds a strong market position. eBay Inc (EBAY, Financial) has a market cap of $25.99 billion, Coupang Inc (CPNG, Financial) is valued at $40.08 billion, and Chewy Inc (CHWY, Financial) stands at $7.18 billion. Sea Ltd's market cap of $32.09 billion places it comfortably within this competitive set, reflecting its significant presence in the e-commerce and gaming sectors.
Conclusion
In summary, Sea Ltd's stock performance has been a roller coaster, with a recent uptick suggesting a positive outlook. The company's profitability metrics, while not leading the industry, show a stable foundation. Its growth prospects are particularly strong, with high growth ranks and promising future estimates. Sea Ltd's market position is robust, and its notable shareholders reflect the investment community's confidence in its potential. As the company continues to expand its e-commerce and gaming operations, along with its financial services, Sea Ltd presents an intriguing option for value investors seeking growth opportunities in dynamic markets.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
