$Sea Ltd(SE)$ $Alibaba(BABA)$ $MercadoLibre(MELI)$ π¨ππ₯ Sea Ltd Capitulation or Structural Inflection? Bearish Flow Spikes While Earnings Power Accelerates π₯ππ¨
Iβm seeing Sea Ltd $SE under heavy bearish flow this morning with 20K+ puts traded, roughly 10Γ normal volume. Feb 130p is the most active strike while fresh positioning builds in June 100p. Price is down about -6% on the day, trading near its lowest level since April and still roughly -13% Y/Y as momentum unwinds across growth names.
Yet the earnings and cash flow trajectory keeps strengthening.
TTM revenue now exceeds $21B, growing about 38% YoY, with a 5-year revenue CAGR near 22%. Profitability has structurally flipped higher, net margins sit near 6.7%, net income is roughly $1.4B TTM, and free cash flow has firmly turned positive after the 2022 reset. I see this as a clear regime shift from cash burn to durable cash generation.
Forward expectations continue to compound:
β’ 2025 revenue projected near $22.3B with EPS around $3.50
β’ 2026 revenue projected near $27.8B with EPS near $5.00
β’ 25 to 30%+ forward compound growth expected
Valuation still screens attractively relative to growth:
β’ Forward P/E roughly 30
β’ PEG near 0.4, signalling undervaluation versus earnings expansion
β’ Price to sales near 3.7
β’ ROIC around 27%
β’ Consensus analyst targets cluster near $190, implying major upside if execution holds
Current price action looks like volatility-driven liquidity drainage rather than structural breakdown, with selling pressure pushing price away from underlying earnings momentum. Historically, these flushes tend to mark zones where accumulation returns once positioning exhausts.
Competition from Lazada and margin investment in Shopee still pressure sentiment, but I continue to see fintech as the core rerating engine.
Fintech revenue reached about $990M in Q3, up 61% YoY. The loan book expanded to $7.9B, up 70%, while NPLs remain around 1%. Five million first-time borrowers were added in a single quarter, deepening ecosystem engagement and expanding long-term monetisation potential. As fintech becomes a larger share of group revenue, margin architecture should structurally improve.
Garena bookings stabilising also reduces reliance on pure e-commerce sensitivity.
Upcoming Q4 earnings in early March remain the next catalyst, with expectations around $6.4B revenue and roughly $0.85 EPS, which could reinforce the earnings rerating narrative if execution continues.
Short-term positioning remains defensive. Long-term earnings power keeps rising.
I see this disconnect as the type of asymmetry where volatility creates opportunity while fundamentals quietly strengthen.
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