Sea Limited on Track for Lowest Close Since December 2025 — Data Talk

Quality compounders are flywheels. Said differently, they’re businesses that generate heaps of profits and consistently reinvest them to produce even more profits. Rinse and repeat.

Companies such as these set the gold standard in public market investing. On that note, here are three quality compounders that could amplify your portfolio’s returns.

Sea (SE)

Market Cap: $82.43 billion

Founded in 2009 and a publicly traded company since 2017, Sea started as a gaming platform and has since expanded to offer a variety of services such as e-commerce, digital payments, and financial services across Southeast Asia.

Why Do We Love SE?

• Paying Users are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
• Incremental sales over the last three years have been highly profitable as its earnings per share increased by 42.6% annually, topping its revenue gains
• Free cash flow margin jumped by 36.3 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

TransDigm (TDG)

Market Cap: $78.02 billion

Supplying parts for nearly all aircraft currently in service, TransDigm develops and manufactures components and systems for military and commercial aviation.

Why Should You Buy TDG?

• Average organic revenue growth of 12% over the past two years demonstrates its ability to expand independently without relying on acquisitions
• Additional sales over the last two years increased its profitability as the 20.2% annual growth in its earnings per share outpaced its revenue
• Strong free cash flow margin of 19.6% enables it to reinvest or return capital consistently, and its recently improved profitability means it has even more resources to invest or distribute

TransDigm’s stock price of $1,389 implies a valuation ratio of 35.8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.

Dycom (DY)

Market Cap: $10.27 billion

Working alongside some of the most popular mobile carriers in the world, Dycom builds and maintains telecommunications infrastructure.

Why Will DY Outperform?

• Annual revenue growth of 11.8% over the past two years was outstanding, reflecting market share gains this cycle
• Operating margin expanded by 5.9 percentage points over the last five years as it scaled and became more efficient
• Share repurchases have amplified shareholder returns as its annual earnings per share growth of 33.3% exceeded its revenue gains over the last five years

At $354.45 per share, Dycom trades at 28.7x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.

What Happened?

Shares of e-commerce and gaming company Sea jumped 3.3% in the morning session after Maybank upgraded the stock to 'Buy' from 'Hold', viewing a recent selloff as overdone. 

The analyst noted that the shares had dropped 36% from their 2025 peak, which created a more attractive risk-to-reward profile at current levels. Maybank kept its price target unchanged at $156. The firm believed that Sea's ongoing investments in its e-commerce platform, Shopee, particularly in its VIP program and fulfillment network, would strengthen its competitive position in Southeast Asia. The upgrade also pointed to future upside coming from Monee, the company's financial services arm.

After the initial pop the shares cooled down to $129.40, up 1.4% from previous close.

What Is The Market Telling Us

Sea’s shares are quite volatile and have had 15 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 5 months ago when the stock gained 19.6% on the news that it announced strong second-quarter results that overshadowed an earnings miss. 

The company's revenue grew 31.6% year-over-year to $5.26 billion, comfortably beating Wall Street's estimate of $5.01 billion. While its GAAP profit of $0.65 per share missed analyst expectations, investors appeared to focus on other positive metrics. The company's adjusted EBITDA, a measure of profitability, came in at $829.2 million, also beating consensus estimates. Furthermore, Sea demonstrated robust user growth, with paying users increasing to 61.8 million. This combination of strong top-line performance and an expanding user base fueled optimism about the company's prospects.

Sea is up 23.4% since the beginning of the year, but at $129.40 per share, it is still trading 34.1% below its 52-week high of $196.50 from September 2025. Investors who bought $1,000 worth of Sea’s shares 5 years ago would now be looking at an investment worth $660.02.

Shareholders of Sea would probably like to forget the past six months even happened. The stock dropped 20.3% and now trades at $127.54. This might have investors contemplating their next move.

Following the drawdown, is now an opportune time to buy SE? Find out in our full research report, it’s free for active Edge members.

Why Is Sea a Good Business?

Founded in 2009 and a publicly traded company since 2017, Sea started as a gaming platform and has since expanded to offer a variety of services such as e-commerce, digital payments, and financial services across Southeast Asia.

1. Paying Users Skyrocket, Fueling Growth Opportunities

As an online marketplace, Sea generates revenue growth by increasing both the number of users on its platform and the average order size in dollars.

Over the last two years, Sea’s paying users, a key performance metric for the company, increased by 21.9% annually to 65.9 million in the latest quarter. This growth rate is among the fastest of any consumer internet business and indicates its offerings have significant traction.

2. Outstanding Long-Term EPS Growth

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Sea’s full-year EPS flipped from negative to positive over the last three years. This is a good sign and shows it’s at an inflection point.

3. Increasing Free Cash Flow Margin Juices Financials

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

As you can see below, Sea’s margin expanded by 36.3 percentage points over the last few years. This is encouraging, and we can see it became a less capital-intensive business because its free cash flow profitability rose more than its operating profitability. Sea’s free cash flow margin for the trailing 12 months was 21.3%.

Final Judgment

These are just a few reasons why we think Sea is a great business. After the recent drawdown, the stock trades at 19.5× forward EV/EBITDA (or $127.54 per share). Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.

What Happened?

A number of stocks jumped in the afternoon session after renewed enthusiasm for Alphabet reinvigorated the artificial intelligence trade, propelling a market rebound heading into the Thanksgiving holiday. The Nasdaq index jumped 2.6% and the S&P 500 gained 1.6%, driven by a 5% rally in Alphabet following the announcement of its upgraded Gemini 3 AI model. This optimism spilled over into the broader tech sector. The rally built on momentum from the previous trading session, sparked by the New York Fed president keeping the door open for a December interest rate cut.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Online Marketplace company eHealth jumped 4%. Is now the time to buy eHealth? Access our full analysis report here, it’s free for active Edge members.
• Online Marketplace company Sea jumped 3%. Is now the time to buy Sea? Access our full analysis report here, it’s free for active Edge members.
• Online Retail company Coupang jumped 2.9%. Is now the time to buy Coupang? Access our full analysis report here, it’s free for active Edge members.

Zooming In On eHealth (EHTH)

eHealth’s shares are extremely volatile and have had 58 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 3 days ago when the stock gained 6.9% on the news that comments from a key Federal Reserve official bolstered hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.

eHealth is down 59.5% since the beginning of the year, and at $3.62 per share, it is trading 67.5% below its 52-week high of $11.14 from February 2025. Investors who bought $1,000 worth of eHealth’s shares 5 years ago would now be looking at an investment worth $47.70.