Why We’re Still Bullish on Sea (SE) Despite the 45% Slide
Sea Limited (NYSE:SE) has been through a brutal stretch. Since November 2025, the stock has shed 44.9% of its value, falling to $86.28 per share as of last week. For investors who bought in at the peak, the pain is real. But for those watching from the sidelines, the question is becoming harder to ignore: is this a falling knife — or a rare entry point?
Founded in 2009 and listed in 2017, Sea started as a gaming company before evolving into a Southeast Asian digital powerhouse spanning e-commerce, digital payments, and financial services. Its flagship platform, Shopee, remains a dominant force in the region, and the company’s ability to convert users into paying customers has been nothing short of impressive.
Over the past two years, Sea’s paying user base has grown at a compound annual rate of 24.9%, reaching 58 million in the most recent quarter. That kind of traction is rare even among the fastest-growing consumer internet businesses. “When you see user growth like that, you have to ask yourself whether the market is pricing in a worst-case scenario that hasn’t materialized,” said Michael Tran, a Singapore-based tech analyst.
Earnings per share have also turned a corner. After years of losses, Sea’s full-year EPS flipped positive over the last three years — a clear inflection point. Free cash flow tells an even more encouraging story. The company’s free cash flow margin expanded by 30.7 percentage points over the same period, reaching 21.4% on a trailing twelve-month basis. That’s not just profitability — that’s capital efficiency.
“I’m tired of hearing people call Sea a dead stock,” said Priya Nair, a retail investor based in Mumbai who has held SE shares since 2023. “The fundamentals are there. The panic is just noise. If you sold at the bottom, you’re the one who lost, not the company.”
Not everyone is convinced. “Look, I get the appeal — growth, margins, all that. But a 45% drop doesn’t happen for no reason,” said David Chen, a portfolio manager at a mid-sized hedge fund in New York. “The macro headwinds in Southeast Asia are real. Currency pressures, regulatory uncertainty, competition from Alibaba and TikTok Shop — these aren’t going away. I’d rather wait for a clearer signal.”
At 13 times forward EV/EBITDA, Sea’s valuation is far from demanding. For context, the stock traded at multiples above 30x during its 2021 heyday. The current discount reflects a market that has priced in significant risk — perhaps too much, according to some bulls.
For investors willing to look past the short-term noise, Sea offers a rare combination of user momentum, improving profitability, and a beaten-down valuation. Whether that’s enough to reverse the slide remains to be seen. But for those who believe in the long-term story of Southeast Asia’s digital economy, the current price may be worth a closer look.
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