Sea Limited (SE): A Bull Case Theory

We came across a bullish thesis on Sea Limited on GabGrowth’s Substack. In this article, we will summarize the bulls’ thesis on SE. Sea Limited's share was trading at $126.55 as of January 28th. SE’s trailing and forward P/E were 55.51 and 32.47 respectively according to Yahoo Finance.

Sea Limited, through its subsidiaries, operates as a consumer internet company in Southeast Asia, Latin America, the rest of Asia, and internationally. SE Limited’s nearly 10% pullback, which erased weeks of gains amid unusually high trading volume, appeared driven more by market overreaction than any deterioration in fundamentals, as no new negative catalysts emerged and the company continues to operate from its strongest competitive position in recent quarters.

Its Q2 2025 results underscored robust momentum across all business segments, with revenue up 38.2% YoY to $5.26 billion and earnings slightly below consensus as the company prioritizes growth over near-term profitability. Shopee delivered exceptional performance with 3.3 billion orders, $29.8 billion in GMV, and $3.8 billion in revenue, supported by rising take-rates and explosive traction in Brazil, where monthly active buyers grew over 30% YoY.

Monee sustained its rapid expansion with loans outstanding rising 94% YoY to $6.9 billion, revenue up 70%, and adjusted EBITDA growing 55%, while maintaining a disciplined 1.0% NPL90+ ratio and surpassing 30 million active borrowers. Garena also continued its resurgence, reporting 23% YoY bookings growth, nearly 665 million active users, and strong durability of Free Fire as it remains one of the world’s most played titles.

Management’s raised full-year outlook further reinforces the strength of the business. From a valuation standpoint, the company screens attractively at 42x forward earnings given EPS growth expected to exceed 170% this year, supported by accelerating fundamentals across e-commerce, digital finance, and gaming. Technically, the stock remains above its long-term moving averages and appears to be approaching a key support zone near $145–$150, which could offer an appealing entry point for long-term investors should the recent sell-off continue.

Previously, we covered a bullish thesis on Sea Limited (SE) by Wolf of Harcourt Street in May 2025, which highlighted the strong earnings rebound driven by Shopee’s accelerating growth, Garena’s user resurgence, and Sea Money’s disciplined expansion. SE’s stock price has depreciated by approximately 22.86% since our coverage due to market volatility. GabGrowth shares a similar view but emphasizes valuation appeal and technical support levels.

Sea Limited is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 102 hedge fund portfolios held SE at the end of the third quarter which was 102 in the previous quarter. While we acknowledge the risk and potential of SE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SE and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.