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Sea Limited - AI Stock Analysis

Analysis generated February 16, 2025

Sea Limited (NYSE: SE) is a leading global consumer internet company based in Singapore. The company operates three core businesses across digital entertainment, e-commerce, and digital payments and financial services. Garena, its digital entertainment arm, is a global game developer and publisher. Shopee, its e-commerce division, is a leading platform in Southeast Asia and Taiwan. Finally, SeaMoney is a digital payments and financial services provider. The diverse portfolio positions Sea Limited strategically in the rapidly growing Southeast Asian digital economy.

Fundamental Analysis

Sea Limited's financial performance for the last quarter highlights its growth trajectory. Revenue for the last quarter was $4.33 billion. This is a 13.99% increase compared to the previous quarter, which is a positive sign of growth. Compared to the same quarter last year, there is a remarkable 30.76% increase, reinforcing a positive year-over-year growth trend.

Net income for the last quarter was $153 million, showing a substantial increase of 87.77% compared to the previous quarter. Compared to the same quarter last year, the increase is an astounding 206.49%, which highlights significant improvement in profitability.

However, it's important to note that the EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for the last quarter was $202 million, representing a decrease of 18.31% from the previous quarter. While this indicates a need for concern on a quarterly basis, there is a considerable year-over-year growth of 1,080.03%.

The current Price-Earnings (P/E) ratio stands at 899.67. Such a high P/E ratio may indicate that the stock is potentially overvalued, which can be seen as a bearish signal.

Technical Analysis

Today's stock price for Sea Limited is $134.95. This represents an impressive increase of 20.89% compared to a month ago, suggesting a positive short-term trend. Compared to a year ago, the stock price has surged by 199.96%, indicating a favorable long-term trend. The overall trend appears bullish.

The current Simple Moving Average for the last 10 days (SMA10) is $129.26, slightly higher than the previous SMA10 of $128.03. This indicates a potential upward trend in price movement.

The Relative Strength Index (RSI) is 89.8, which falls into the "overbought" territory. This suggests a potential bearish condition and may imply that the stock could be due for a correction.

Alternative Data Analysis

Analyzing alternative data points paints a mixed picture for Sea Limited. Starting with job postings, the company has 14 open positions according to data from popular job boards. This number is down by 18% in the last couple of months, indicating potential efforts to improve margins or cut costs, which is not a favorable sign for a growth-oriented company.

Employee sentiment, however, remains high, with an estimated 94% of employees having a positive outlook on the company's future, which is a positive sign.

Customer acquisition and engagement metrics are more concerning. Sea Limited's estimated 480,000 website visitors represent a 39% decline over the last couple of months, signaling a potential loss in customers. Additionally, the company's Twitter page has 1,600 followers, with no growth or decline in the last couple of months, suggesting stagnation in social media engagement.

Finally, AltIndex's AI score for Sea Limited is 75, which translates to a "buy" signal. This score incorporates fundamental, technical, and alternative data for a holistic view of the company's stock potential.

Conclusion

In conclusion, Sea Limited exhibits several strong fundamental growth indicators, including impressive revenue and net income increases year-over-year, despite some quarterly challenges in EBITDA. The high P/E ratio suggests the stock may be overvalued, but the bullish trend supported by technical analysis highlights continued investor interest. However, alternative data points such as declining job postings and website visits present cautionary signs.

Overall, considering the holistic picture of Sea Limited's performance, the stock is currently performing well with significant growth potential. However, potential investors should be mindful of the mixed signals from alternative data and proceed with balanced expectations.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.