Singapore-based Sea Limited (SE) crashed this morning after the Shopee owner reported better-than-expected revenue but missed on earnings estimates for Q4, signaling it’s spending more than anticipated to sustain growth.
However, the post-earnings selloff has pushed SE’s relative strength index (14-day) down to about 27 only, a technical setup that often precedes a relief rally.
Long-term investors should consider loading up on Sea stock also because, down some 40% versus its year-to-date high, it’s no longer an expensive name to own in 2026.
While investors seem to be focusing entirely on the earnings miss, Sea’s release actually signalled a “powerhouse” operating at peak velocity.
Shopee witnessed an explosive 70% increase in ad revenue, proving SE is successfully transitioning from a subsidized growth model to a high-margin advertising machine.
Meanwhile, the company’s fintech arm, Monee, saw its loan book nearly double to $9.2 billion in the Q4 while remarkably keeping its non-performing loans (NPL) stable at 1.1% only.
With management guiding for Garena’s gross merchandise value (GMV) to grow by 25% this year, the post-earnings selloff in SE stock undermines just how quickly this NYSE-listed firm is buying dominant, profitable market share in a digital economy that’s still in its early innings.
Jefferies also recommends owning Sea shares as the company’s Q4 print confirms it’s getting much better at monetizing its existing user base.
Garena’s “Free Fire” is leveraging new IP collaborations, which the investment firm believes will help boost the segment’s (gaming) cash flow.
Additionally, its analysts are convinced that Shopee’s dominance, as evidenced in the 28.6% GMV growth in the fourth quarter, will sustain through the remainder of 2026.
While increased logistics spending and the broader sentiment surrounding high-growth tech stocks made Jefferies trim its estimates on March 3, its downwardly revised price target of $150 still signals potential upside of nearly 70% from here.
Other Wall Street analysts also remain bullish on SE shares even though they’re trading decisively below their major moving averages (MAs) at the time of writing.
