Sea Limited (SE) Upgraded to Buy Following Strong Shopee Growth and Garena Resurgence

Core Viewpoint - Sea Limited is identified as a strong investment opportunity for the next five years, with analysts maintaining a positive outlook following its recent earnings report and growth in key segments [1][2]. Financial Performance - Sea Limited reported record total revenue of $6 billion for Q3 2025, marking a 38% year-over-year increase [3]. - Adjusted EBITDA grew by 68% to $874 million, while net income more than doubled from $153 million to $375 million [3]. - The diluted EPS reached $0.59, reflecting strong financial performance driven by e-commerce and digital entertainment [3]. E-commerce Segment (Shopee) - Shopee achieved a record GMV of $32.2 billion and gross order volume of $3.6 billion, both showing a 28% year-over-year growth [4]. - Advertising revenue surged over 70%, with the ad take rate increasing by more than 80 basis points [4]. - The Shopee VIP membership program expanded to over 3.5 million members, a 75% increase quarter-on-quarter, with members spending approximately 40% more after joining [4]. Gaming Segment (Garena) - The Garena gaming segment experienced a resurgence, reporting its best results since 2021, contributing positively to the overall performance of Sea Limited [2][3]. Analyst Ratings - Bank of America Securities maintained a Buy rating on Sea Limited with a price target of $200 [1]. - Phillip Securities upgraded Sea Limited to Buy from Neutral, with an unchanged price target of $170, citing favorable entry points and increased revenue estimates for FY25 and FY26 [2].