- In our last update on the stock, it was trading at $330 per share, up 20% from April when we considered the stock almost fairly valued in the best scenario.
- We are relying on the same valuation approach checking what is the implied discount rate which delivers current share price assuming current consensus estimates which have been sharply revised.
- This means that SEA Limited (SE hereinafter) is going through a reality check.
- We believe that, despite the recent sharp market correction, the mismatch is still in place and is even more evident considering sharp consensus downward revision going on after Q3 report.
- Despite the fact the SE remains one of the most exciting growth equity stories, valuation has been insane for a while as expectations (especially around around Garena) were far too high.
For further details see:
Sea Limited, Reality Check In Progress