Why Sea Stock Plummeted Today

Shares of Sea Limited (NYSE: SE), the leading e-commerce powerhouse in Southeast Asia, were down 11% as of 3:30 p.m. ET on Friday, according to data provided by S&P Global Market Intelligence.

In total this week, Sea's shares have slid 16% as volatility hit the markets after the United States announced tariffs on many of the countries in the company's region.

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However, the tariffs don't actually impact Sea's operations, making its recent sell-off from this contagion a potential opportunity for investors.

Sea-sawing along with volatility

If anything, Sea's recent share price decline may be more of a "breather" for the stock after it had doubled over the last year as the company continued its incredible turnaround.

In 2024, Sea grew revenue by 29%, while its net income nearly tripled. What makes these results particularly exciting for investors is that it was broad-based across all three of Sea's business segments: e-commerce (Shopee), digital financial services (SeaMoney), and digital entertainment (Garena).

Shopee and SeaMoney grew revenue by 38% and 35% during the year, while Garena delivered an increase in bookings of 19%. Better yet, all three segments reported positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), with overall adjusted EBITDA rising 66% in 2024.

Armed with roughly $10 billion in cash on hand, Sea is well funded to continue growing two of its key growth areas: its upstart Brazilian e-commerce unit and its lending segment.

In Q4, Sea grew its e-commerce monthly active users by 40% in Brazil, alongside a second straight quarter of break-even adjusted EBITDA. Meanwhile, its lending unit grew loan principal outstanding by 60% while maintaining a low non-performing loan ratio of 1.2%.

Now trading at just 27.9 times forward earnings, Sea's promising growth potential looks attractively priced.

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Josh Kohn-Lindquist has positions in Sea Limited. The Motley Fool has positions in and recommends Sea Limited. The Motley Fool has a disclosure policy.