Sea is the leader of the pack in its home turf (which, relative to other economic loci around the world, is highly enviable turf), a behemoth of e-commerce, fintech, gaming, and logistics. I wouldn't be surprised if they one day boasted a thriving ad business, as well.
They are net debt negative (with their currently-US$5.4B cash pile now growing again, having bottomed in 4Q23), and consensus has them posting an adj. EPS growth rate of 80% in FY25. Yes, I said an eighty percent growth rate in earnings.
What earnings multiple are you paying for that 2025 EPS?
28.5 ...No, I'm not joking. Sea is trading at 28.5x next year's adj. EPS, and it's expected to be posting a growth rate of eighty frickin' percent.
The year after that, you ask? It's still expected to be in earnings-hypergrowth mode, with 2026 adj. EPS consensus indicating a growth rate of 43.8%...
And what earnings multiple are you paying for that 2026 EPS?
19.8
A dominant leader of the world's most dynamic economic region with a fast-growing, robust, diversified business, solidly in hypergrowth mode, and it's currently carrying a forward (2026) valuation verging on value stock territory.
Are we sure there's no more room for multiple expansion as we head into a global rate-cutting cycle?
I'll keep holding, and I'll come back and visit in a year's time.
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