Sea Limited Reports Strong Q4 Earnings but Shares Drop 16%
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Should l Buy SE?
Source: seekingalpha
- Strong Earnings Report: Sea Limited's Q4 results showed nearly 40% year-over-year growth in net sales and a 36% increase in gross profit, with net income exceeding $410.9 million or $0.63 per share, yet shares fell 16%, indicating market concerns over rising costs.
- Increased Credit Losses: The company set aside over $393 million for credit losses in Q4, a 67% increase from the same quarter last year, primarily linked to uncollected loans in its Monee business, highlighting escalating credit risk.
- Rising Operating Costs: Monee's sales and marketing expenses more than doubled in 2025, driving revenue costs up over 35%, while Shopee and Garena saw revenue costs rise by 33% and 30% respectively, putting pressure on overall profitability.
- Future Outlook: Sea Limited expects Shopee's annual GMV to grow by approximately 25% in 2026, with adjusted EBITDA projected to remain flat or slightly increase from 2025, as CEO Forrest Li emphasizes the continuation of successful strategies for strong growth.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy SE?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on SE
Wall Street analysts forecast SE stock price to rise
12 Analyst Rating
11 Buy
1 Hold
0 Sell
Strong Buy
Current: 87.820
Low
138.00
Averages
184.58
High
226.00
Current: 87.820
Low
138.00
Averages
184.58
High
226.00
About SE
Sea Limited is a consumer Internet company. The Company, through its subsidiaries, operates three core businesses of e-commerce, digital financial services, and digital entertainment, known as Shopee, SeaMoney and Garena. Its segments are e-commerce, digital financial services, and digital entertainment. The platform of Garena offers mobile and personal computer online games and develops mobile games for the global market. It offers e-sports and provides access to other entertainment content and social features, such as live-streaming of gameplay, user chat, and online forums. The platform of Shopee is a mobile-centric, social-focused marketplace. It provides users a shopping environment with integrated payment, logistics infrastructure, and seller services. SeaMoney provides digital financial services and products, including mobile wallet services, payment processing, credit, banking, and Insurtech. It operates in Indonesia, Taiwan, Thailand, Singapore, Malaysia, and the Philippines.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Sea Ltd Reports Strong Q4 Growth but Earnings Miss Expectations
- Significant Revenue Growth: Sea Ltd's Q4 revenue rose 38.4% year-on-year to $6.85 billion, surpassing analyst expectations of $6.45 billion, indicating strong market performance.
- Shopee's Strong Performance: Shopee's quarterly revenue increased 35.8% to $4.3 billion, driven by GMV growth, with total gross orders reaching 4 billion, a 30.5% year-on-year increase, reflecting its expanding market share.
- Monee's Robust Growth: Monee's quarterly revenue surged 54.3% to $1.1 billion, fueled by growth in its credit business, with adjusted EBITDA at $263.1 million, up 24.7%, showcasing the potential of its financial services.
- Garena User Growth: Garena's quarterly revenue climbed 35.1% to $701 million, with active users reaching 633.3 million, a 2.5% year-on-year increase, indicating a sustained expansion of its user base in the gaming sector.
See More
U.S. STOCKS OF SEA PLUMMET 25% FOLLOWING REPORT OF RISING QUARTERLY OPERATING COSTS
- Stock Performance: U.S. listed shares of Sea Limited dropped by 25% following the release of quarterly reports.
- Operating Expenses: The decline in stock value is attributed to a surge in the company's operating expenses during the reported quarter.
See More
Oversold Stocks Set for Potential Rebound in Global Markets
- Oversold Stock List: A search using the Benzinga Pro Scanner identified stocks with market caps over $2 billion and RSI below 30, with KraneShares CSI China Internet ETF (KWEB) showing an RSI of 18.32, indicating extreme oversold conditions that may lead to a rebound if risk appetite improves.
- JD.com Performance: JD.com has an RSI of 24.42, with shares around $25.21, down 1.68% on the day, reflecting the overall pressure on Chinese consumer and internet stocks, potentially providing short-term trading opportunities for investors.
- Broad Market Overselling: iShares China Large-Cap ETF (FXI) posts an RSI of 24.99, trading near $35.89, indicating that selling pressure has broadened from individual stocks to major Chinese benchmarks, which may influence investors' regional allocation decisions.
- Emerging Market Signals: iShares MSCI India ETF (INDA) shows an RSI of 29.75, trading around $50.03, indicating oversold conditions and suggesting that selling pressure has spread to broader Asian and emerging markets, potentially prompting long-term investors to reassess their risk tolerance.
See More
Investment Opportunities and Challenges in Tech Stocks
- Trade Desk Stock Decline: The Trade Desk's stock has plummeted over 80% since December 2024, dropping from $141 to $24.99, primarily due to economic uncertainty and data privacy regulations, although customer retention remains high at 95%.
- Sea Limited Growth Potential: Sea Limited's revenue grew by 35% to over $16 billion in the first nine months of 2025, despite a 45% drop in stock price from its highs, yet its low forward P/E ratio of 22 may attract investor interest.
- Lyft Financial Performance: Lyft reported a 15% increase in gross bookings in 2025, with revenue rising only 9%, but its free cash flow exceeded $1.1 billion, a 46% increase from 2024, and plans to allocate $1 billion for share buybacks.
- Market Overreaction: Despite intensified competition and market volatility, investors may find these tech stocks increasingly attractive as valuations improve, especially amid concerns over AI's impact on the industry, suggesting potential rebound opportunities.
See More
Low Valuations in Tech Stocks Present Investment Opportunities
- Trade Desk Valuation Drop: Since December 2024, The Trade Desk's stock has plummeted over 80% from above $141 per share to an all-time low, yet its customer retention remains above 95%, indicating resilience in the advertising sector despite challenges.
- Sea Limited Growth Potential: Sea Limited reported over $16 billion in revenue for the first nine months of 2025, a 35% increase, although its stock has dropped approximately 45% since September, its strong market position in Southeast Asia remains intact.
- Lyft Stock Volatility: Lyft's stock has lost about 45% since November 2022, despite a 15% increase in gross bookings for 2025 and free cash flow exceeding $1.1 billion, suggesting potential for future growth.
- Investor Sentiment Shift: Following the AI boom, investor confidence in tech stocks has waned; however, the low valuations of The Trade Desk and Sea Limited may present opportunities for investors to reassess and enter the market.
See More
Global Stock Markets Retreat as Oil Prices Surge
- Market Decline: The S&P 500 index fell by 0.94%, reaching a 3.25-month low, reflecting investor concerns over escalating tensions in Iran, which may impact future investment decisions and market stability.
- Surge in Oil Prices: WTI crude oil prices rose over 4% to an 8.5-month high due to threats from Iran to close the Strait of Hormuz, intensifying fears of energy supply disruptions and potential inflationary pressures in the economy.
- Natural Gas Price Spike: European natural gas prices surged more than 22% to a three-year high after Qatar's Ras Laffan plant was targeted by an Iranian drone attack, posing significant risks to global liquefied natural gas supply and market stability.
- Economic Data Expectations: This week, the ADP employment change is expected to increase by 50,000, while the ISM services index is projected to slip slightly, with markets closely monitoring these indicators to assess economic health and potential implications for Federal Reserve monetary policy decisions.
See More
Sea Ltd Reports Strong Q4 Growth but Earnings Miss Expectations
- Significant Revenue Growth: Sea Ltd's Q4 revenue rose 38.4% year-on-year to $6.85 billion, surpassing analyst expectations of $6.45 billion, indicating strong market performance.
- Shopee's Strong Performance: Shopee's quarterly revenue increased 35.8% to $4.3 billion, driven by GMV growth, with total gross orders reaching 4 billion, a 30.5% year-on-year increase, reflecting its expanding market share.
- Monee's Robust Growth: Monee's quarterly revenue surged 54.3% to $1.1 billion, fueled by growth in its credit business, with adjusted EBITDA at $263.1 million, up 24.7%, showcasing the potential of its financial services.
- Garena User Growth: Garena's quarterly revenue climbed 35.1% to $701 million, with active users reaching 633.3 million, a 2.5% year-on-year increase, indicating a sustained expansion of its user base in the gaming sector.
See More
U.S. STOCKS OF SEA PLUMMET 25% FOLLOWING REPORT OF RISING QUARTERLY OPERATING COSTS
- Stock Performance: U.S. listed shares of Sea Limited dropped by 25% following the release of quarterly reports.
- Operating Expenses: The decline in stock value is attributed to a surge in the company's operating expenses during the reported quarter.
See More
Oversold Stocks Set for Potential Rebound in Global Markets
- Oversold Stock List: A search using the Benzinga Pro Scanner identified stocks with market caps over $2 billion and RSI below 30, with KraneShares CSI China Internet ETF (KWEB) showing an RSI of 18.32, indicating extreme oversold conditions that may lead to a rebound if risk appetite improves.
- JD.com Performance: JD.com has an RSI of 24.42, with shares around $25.21, down 1.68% on the day, reflecting the overall pressure on Chinese consumer and internet stocks, potentially providing short-term trading opportunities for investors.
- Broad Market Overselling: iShares China Large-Cap ETF (FXI) posts an RSI of 24.99, trading near $35.89, indicating that selling pressure has broadened from individual stocks to major Chinese benchmarks, which may influence investors' regional allocation decisions.
- Emerging Market Signals: iShares MSCI India ETF (INDA) shows an RSI of 29.75, trading around $50.03, indicating oversold conditions and suggesting that selling pressure has spread to broader Asian and emerging markets, potentially prompting long-term investors to reassess their risk tolerance.
See More
Investment Opportunities and Challenges in Tech Stocks
- Trade Desk Stock Decline: The Trade Desk's stock has plummeted over 80% since December 2024, dropping from $141 to $24.99, primarily due to economic uncertainty and data privacy regulations, although customer retention remains high at 95%.
- Sea Limited Growth Potential: Sea Limited's revenue grew by 35% to over $16 billion in the first nine months of 2025, despite a 45% drop in stock price from its highs, yet its low forward P/E ratio of 22 may attract investor interest.
- Lyft Financial Performance: Lyft reported a 15% increase in gross bookings in 2025, with revenue rising only 9%, but its free cash flow exceeded $1.1 billion, a 46% increase from 2024, and plans to allocate $1 billion for share buybacks.
- Market Overreaction: Despite intensified competition and market volatility, investors may find these tech stocks increasingly attractive as valuations improve, especially amid concerns over AI's impact on the industry, suggesting potential rebound opportunities.
See More
Low Valuations in Tech Stocks Present Investment Opportunities
- Trade Desk Valuation Drop: Since December 2024, The Trade Desk's stock has plummeted over 80% from above $141 per share to an all-time low, yet its customer retention remains above 95%, indicating resilience in the advertising sector despite challenges.
- Sea Limited Growth Potential: Sea Limited reported over $16 billion in revenue for the first nine months of 2025, a 35% increase, although its stock has dropped approximately 45% since September, its strong market position in Southeast Asia remains intact.
- Lyft Stock Volatility: Lyft's stock has lost about 45% since November 2022, despite a 15% increase in gross bookings for 2025 and free cash flow exceeding $1.1 billion, suggesting potential for future growth.
- Investor Sentiment Shift: Following the AI boom, investor confidence in tech stocks has waned; however, the low valuations of The Trade Desk and Sea Limited may present opportunities for investors to reassess and enter the market.
See More
Global Stock Markets Retreat as Oil Prices Surge
- Market Decline: The S&P 500 index fell by 0.94%, reaching a 3.25-month low, reflecting investor concerns over escalating tensions in Iran, which may impact future investment decisions and market stability.
- Surge in Oil Prices: WTI crude oil prices rose over 4% to an 8.5-month high due to threats from Iran to close the Strait of Hormuz, intensifying fears of energy supply disruptions and potential inflationary pressures in the economy.
- Natural Gas Price Spike: European natural gas prices surged more than 22% to a three-year high after Qatar's Ras Laffan plant was targeted by an Iranian drone attack, posing significant risks to global liquefied natural gas supply and market stability.
- Economic Data Expectations: This week, the ADP employment change is expected to increase by 50,000, while the ISM services index is projected to slip slightly, with markets closely monitoring these indicators to assess economic health and potential implications for Federal Reserve monetary policy decisions.
See More
