Sea Limited (SE) Fundamental & Technical Analysis


SE

Chart done on hourly candles. Sea Limited is trading at a level not seen in over three years, which places it either in a great buying range, or in a very risky range depending on how you view their fundamentals. Sea Limited shares have fallen more than 30% since their most recent earnings, which is a trend we’ve seen in other companies within the online gaming industry. Companies like Roblox and Sea Limited both reported weak growth in the digital entertainment business, but SE has the advantage of other revenue streams. SE owns Shopee and Sea Money, both of which grew YoY. Fundamentally, SE is growing in a healthy direction, so this decline may be an opportunity, but some thing to note right away is their current price to earnings ratio, which is currently around 100 accordingly to multiple sources, but this is largely because of their inability to turn consistent profits. Looking at their revenue growth alone, with the right leadership, SE can definitely change move into healthier net. Their balance sheet is decent, reflecting 17B in assets vs 11B in liabilities, but free cash flow is slim to none, making them a bit more vulnerable to unexpected events. 

Technical analysis:

SE is heading towards a gap fill dating back to 2020, around 31.50. If entered, consider a small position and add more if it gives the gap fill. Keep in mind there’s not much support after till 26.50 so have a stop loss in mind. The chart isn’t showing any sign of a bullish reversal as of right now.