Assessing Sea Stock After 99% Gain and Ongoing E-Commerce Expansion in 2025

If you have been keeping an eye on Sea stock, you are definitely not alone. Whether you are contemplating your next move or just trying to make sense of what is driving Sea’s latest ups and downs, now is a great time to pause and reassess. The stock’s journey over the past year has turned heads with a remarkable 99.2% gain. Looking at a longer timeframe, the stock is up 220.1% over the past three years. Momentum has been especially strong year to date, climbing 80.7% so far. The past week’s 4.4% rise suggests renewed optimism among investors.

That said, it has not all been smooth sailing. The last month saw a modest dip of 1.1%, hinting that there is still uncertainty about where the company is headed next. This mix of surging longer-term performance and occasional short-term pullbacks is often a sign that the market is wrestling with new information or shifting sentiment. Recent industry trends and evolving investor risk perceptions around growth companies like Sea may be fueling some of these swings. This highlights both the potential and the unpredictability ahead.

Before making your next move, it is worth digging into how the numbers say Sea stacks up on value. Right now, Sea’s valuation score sits at 2 out of 6, signaling it only passes a couple of the usual undervaluation checks. However, as many investors know, not all scoring systems or metrics capture the full picture. Let us break down these approaches, and by the end, you will see why there may be an even better way to judge what Sea is really worth.

Sea scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Sea Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's value by projecting its future cash flows and discounting those amounts back to today. This approach aims to identify what Sea could be worth based on its ability to generate cash in the years ahead.

Sea's current Free Cash Flow (FCF) stands at $3.73 billion. Over the next several years, analysts project Sea's FCF will continue to grow, reaching an estimated $7.14 billion by 2029. While analysts supply direct forecasts for the next five years, further projections up to 2035 have been extrapolated to gauge longer-term potential.

Based on these forecasts, the DCF model calculates Sea's intrinsic value at $290.92 per share. Compared to its recent share price, this implies the stock trades at a 34.9% discount, suggesting it is significantly undervalued according to this methodology.

In summary, the DCF approach indicates Sea stock offers considerable value, based on robust long-term cash flow potential and the current market price.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Sea.

Our Discounted Cash Flow (DCF) analysis suggests Sea is undervalued by 34.9%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Sea Price vs Earnings (PE)

The Price-to-Earnings (PE) ratio is a popular way to value companies that are generating profits, as it tells investors how much they are paying for each dollar of earnings. For companies like Sea that have recently reached profitability, this metric becomes more relevant and offers a clear benchmark for comparison.

Growth expectations and perceived risks play a large role in determining what a "normal" PE ratio should be. Fast-growing companies or those seen as less risky often trade at higher PE multiples. In contrast, mature or riskier businesses usually see lower ratios. This is why simply knowing a company’s PE is not enough to judge value.

Sea currently trades at a PE ratio of 93.87x, which is notably higher than the Multiline Retail industry average of 21.81x and the peer group average of 59.60x. On the surface, this might signal that the stock is expensive compared to its industry and peers.

This is where Simply Wall St's proprietary Fair Ratio becomes relevant. The Fair Ratio adjusts for factors such as Sea’s earnings growth, profit margin, industry, market cap, and specific risks. As a result, it provides a fair value PE of 39.01x for Sea. This approach is particularly insightful because it tailors the benchmark to Sea's own characteristics rather than relying solely on a broad comparison with peers or industry norms.

Because Sea’s actual PE (93.87x) is much higher than its Fair Ratio (39.01x), this suggests the stock is currently overvalued when accounting for its growth prospects and risks.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Sea Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative brings your investment thesis to life by connecting the company’s story with the numbers, such as your fair value and expectations for Sea’s future revenue, earnings, and margins.

Rather than just relying on historical ratios, a Narrative gives you a way to describe your unique perspective on where Sea is headed and why, linking your view on industry trends, catalysts, and risks directly to a financial forecast and up-to-date fair value estimate. Narratives are available right now within the Community page on Simply Wall St, where millions of investors share, follow, and debate different views. This makes it easy and accessible for anyone to use.

With Narratives, you can clearly see when your story suggests Sea is undervalued or overvalued by comparing your fair value with today’s share price, helping you decide when to buy or sell. Plus, Narratives update dynamically as new information comes in, like quarterly earnings or breaking news, so your outlook always stays relevant.

For example, some investors project that Sea’s aggressive fintech and e-commerce growth warrants a price target as high as $241.00, while others emphasize margin risks and set their fair value as low as $165.00, reflecting just how personalized and actionable Narratives can be.

Do you think there's more to the story for Sea? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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