1 Unstoppable Tariff-Proof Growth Stock to Buy Hand Over Fist During the S&P 500 Correction

Sea Limited (NYSE: SE) operates a hybrid consumer-to-consumer and business-to-consumer e-commerce platform called Shopee that is the largest of its kind in Southeast Asia. The company also has a thriving digital financial services business, as well as a digital entertainment studio that is responsible for one of the most popular mobile games in the world.

The best part for investors now? Sea Limited is based in Singapore and more than 70% of its revenue comes from Asia -- it has very little exposure to North America. This suggests that the steep and sweeping U.S. tariffs that President Donald Trump imposed on nearly every nation last week will have minimal impacts (if any) on Sea Limited.

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Sea stock soared by 162% last year, but it's currently down 27% from its 52-week high amid the steep sell-off in the S&P 500. Since nothing has fundamentally changed for the company since hitting that 52-week high, this might be a great opportunity for investors to scoop up a tariff-proof stock at a discount.

Image source: Getty Images.

Shopee and SeaMoney: A perfect match

Shopee is the biggest e-commerce platform in each of the seven Asian markets in which it operates, and it's rapidly growing in Latin American markets like Brazil. Customers placed $100 billion worth of orders on the platform last year, which was the first time it crossed that milestone.

Sea is laser-focused on improving efficiency in Shopee's supply chain and its wholly owned logistics network, SPX Express. In the final quarter of 2024, almost half of all orders shipped by SPX Express across Asia were delivered in two days or less. Amazon, the world's largest e-commerce company, has publicly noted that customers place orders more frequently when they know they will receive fast delivery, so prioritizing that is a prudent strategy.

At the same time, Sea is also using its SeaMoney digital financial services platform to supercharge Shopee's growth. SeaMoney lends money to merchants on Shopee to help them expand, and it offers "buy now, pay later" loans to consumers. Those things drive more transactions on Shopee, Sea's largest source of revenue.

SeaMoney had $5.1 billion in loans outstanding at the end of 2024, up 64% from the end of 2023. The platform also had a record 26 million active users, which was up 60%. It is now one of the largest consumer lending outfits in Southeast Asia, but it isn't resting on its laurels. Management plans to expand it further this year by focusing on loans outside of the Shopee ecosystem, which will open the door to millions of new potential customers.

Finally, Sea's digital entertainment segment deserves a mention. It's led by the Garena development studio which has created a portfolio of highly successful games. Free Fire is one of them: It was the most downloaded mobile game in the world last year and averaged 100 million daily active users.

Sea's digital entertainment segment had 618 million quarterly active users overall in the final three months of 2024, which was a 16.9% jump from the year-ago period. However, that metric remains below its peak of 729 million from the third quarter of 2021, when online activity was still being bolstered by pandemic-era social distancing restrictions.

Accelerating revenue growth, and soaring profits

Sea generated a record $16.8 billion in revenue during 2024, which was a 29% year-over-year increase. That was its fastest growth rate since 2021, and it marked a sharp acceleration from the 5% growth the company achieved in 2023.

Shopee was the star of the show, contributing $12.4 billion of Sea's total revenue, and growing at a rate of 38%. SeaMoney's revenue also soared by 34.6% to a record $2.4 billion. However, the digital entertainment unit's revenue declined by 13.6% to $1.9 billion, though it did generate modest growth in the fourth quarter, suggesting that a recovery might be underway.

Sea could actually be growing its revenue much faster if it went back to the strategy it used prior to 2022, which involved spending aggressively on things like marketing and research and development. However, at this point, the management team, led by Sea founder and CEO Forrest Li, is prudently managing costs instead to build a more sustainable operation.

During 2024, Sea's total operating expenses only increased by 16.7%. Since revenue grew much faster, more money flowed to the bottom line: Net income rose by an eye-popping 175% to $447.8 million.

Sea stock just got much cheaper

Sea's stock price peaked at $357 during the tech frenzy in 2021, only to plunge by as much as 90% over the following couple of years. Simply put, it couldn't maintain what was an unsustainable valuation.

But the stock staged a comeback during 2024 with a gain of 162%. Based on the company's solid growth, I think its longer-term recovery will continue, and view its recent decline as a great buying opportunity.

From a valuation perspective, Sea's price-to-sales (P/S) ratio is now just 3.9. That's a 58% discount to its average of 9.3 dating back to when the company went public in 2017.

Data by YCharts.

There is one caveat to consider in 2025. Although Sea won't be directly impacted by Trump's tariffs in a meaningful way, it could suffer indirect consequences if his trade war slows the global economy. In that scenario, the company might struggle to generate as much organic revenue growth as it did in 2024, which could prompt management to increase its marketing spending.

But Sea has $10.4 billion in cash and equivalents on hand, so it's unlikely to run into any liquidity issues even if it does choose to spend more aggressively in pursuit of growth. The company's cash pile is also growing now that profits are rolling in, which affords management even more flexibility to ramp up spending.

In summary, this company is rapidly expanding, it has a rock-solid balance sheet, and its valuation is on the cheap side of its historical average. Combine that with the fact it has little exposure to the U.S. and the current tariff situation, and its stock could be a great buy for investors right now.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Sea Limited. The Motley Fool has a disclosure policy.