Why Sea Stock Rose This Week

Core Insights - Sea Limited's shares increased by 8% following a strong earnings report that exceeded sales expectations [1] - The company reported its second consecutive profitable year with significant improvements in its margin profile [2] Financial Performance - In Q4, Sea's revenue grew by 37%, gross profits increased by 45%, and net income margin improved from -3% to 5% [2] - SeaMoney, the finance unit, achieved a revenue increase of 55% while Shopee became profitable in both Asia and Brazil [3] Operational Success - Sea's digital entertainment division, Garena, saw a 17% growth in quarterly active users and a 19% increase in gross bookings [3] - The overall performance in 2024 marked a significant turnaround compared to the challenges faced in 2023, including layoffs and an unprofitable Shopee unit [4] Market Position - Sea's forward price-to-earnings (P/E) ratio stands at 36, which is lower than peers Shopify and MercadoLibre, with P/E ratios of 42 and 67 respectively [5] - The company is increasingly viewed as a growth stock, driven by its leading units Shopee and Garena, along with the rapidly growing SeaMoney segment [5]