Sea Ltd. is the IBD Stock of the Day for Wednesday. Shares of the Southeast Asia e-commerce leader jumped back above their 50-day moving average this week and broke a recent downward trendline.
Singapore-based Sea Ltd. operates Shopee, which is the largest e-commerce platform in Southeast Asia and also operates in parts of Latin America. Other holdings include digital-payments provider SeaMoney and Garena, a global online games developer.
Sea stock has advanced 47% this year, after surging 162% in 2024. After struggling in 2022 and 2023, Sea has rallied back by improving its e-commerce profitability while also accelerating sales growth.
Revenue has increased 30%, 37%, 31% and 23% over Sea's previous four quarters. E-commerce represents about three-quarters of the company's revenues. Analysts polled by FactSet expect earnings-per-share to reach $3.08 for 2025, up more than 300% from 2024.
On the stock market today, Sea stock gained 1.9% to close at 161.30.
In May, Sea stock broke out above a 147.73 consolidation pattern buy point. The breakout came shortly after Sea's first-quarter earnings results. Sea's Q1 adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) increased 136% to $946.5 million, ahead of expectations for $711 million.
The stock could form a new base by the end of this week.
Find Stocks To Watch: From Top IPOs To Large And Small Caps
Sea Ltd. Q2 Earnings Expectations
With gains this week, Sea stock was actionable on Wednesday after retaking its 50-day moving average. It was also slicing above a downward sloping trendline, after dropping from a high near 172.65 early last month.
Sea is projected to report its June-quarter results on or around Aug. 19.
Analysts are anticipating that Sea's revenue growth will slow to about 20% year over year for the quarter, representing $4.55 billion in sales. Earnings are seen growing 264% to 51 cents-per-share. Adjusted EBITDA — a closely watched metric for Sea stock — is expected to grow 80% to $803 million, per FactSet.
Analysts are mostly bullish on Sea stock. Of the 34 analysts following the stock, 27 rate Sea a buy, according to FactSet. The other seven analysts hold a neutral stance.
JPMorgan analyst Ranjan Sharma is among the bullish analysts. He recently reiterated his overweight, or buy, rating on Sea stock, with a price target of 195.
"We believe SE will deliver strong earnings growth underpinned by all its major business segments," Sharma wrote to clients on June 25. "With stable e-commerce competition, rising take-rates among all major players, and continuing optimization on logistics and subsidies, we believe Shopee's growth can come with expanded margin."
Global trade tensions will be something to watch for Sea stock, however. While the company's Shopee platform is focused outside the U.S., Sea stock is not completely insulated from President Donald Trump's use of tariffs. Shares of Sea fell more than 2% last week after Trump threatened stiff tariffs on Brazil, which is a growing market for Shopee.
Sea stock posted a 4% gain Tuesday, the same day Trump announced a trade deal with Indonesia, another crucial market for Shopee.
Sea Stock: Near Top Of Strong-Performing Internet-Retail Group
Meanwhile, Sea stock holds a best-possible IBD Composite Rating of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one.
Sea's relative strength line is down slightly from a month ago but remains a strong 95 out of 99.
Despite uncertainty around global trade from tariffs, e-commerce stocks have outperformed this year. The 59-stock Retail-Internet industry group tracked by IBD ranks 10th among 197 industry groups, based on six-month price performance. The overall group is up 16% year to date.
Sea's strong IBD Composite Rating places it among the top stocks in the industry. It trails only IBD 50 stock DoorDash and food-ordering platform Olo, which recently surged after it announced it would be acquired by private equity firm Thoma Bravo.
