1 world-class growth firm I’m tempted to buy for my Stocks and Shares ISA
Sea Limited (NYSE:SE) used to be a top position in my ISA. However, when growth slowed dramatically for the e-commerce and fintech firm after the pandemic, I sold the stock.
In hindsight, I gave up too early on this tech company. It has revved up the growth engine once more while turning firmly profitable.
And the share price sure has responded positively, surging over 400% in two years. Despite this, Sea’s still nearly 47% off its 2021 peak.
Here are five reasons Iâm seriously considering re-buying the stock.
1. Huge market opportunity
When Iâm weighing up a growth stock, I want to see a massive market opportunity. Sea certainly ticks that box.
Shopee, its flagship e-commerce arm, dominates in Southeast Asia while also expanding in Brazil. In Q2 2025, Shopee processed 3.3bn orders worth nearly US$30bn in gross merchandise value, up around 28% year on year.
E-commerce penetration is still relatively low across much of Asia, which means plenty of runway remains. And its fintech arm (Monee) is quietly scaling into a potential fintech super-app.
Meanwhile, gaming unit Garena owns the popular title Free Fire.
2. Profitability
For years, Sea was criticised as a cash-burning machine. Not anymore. In 2023, it delivered its first full year of positive net income, and it has kept up the momentum since.
Shopeeâs operating leverage is improving, while Garena remains highly cash-generative. Monee is also now contributing positively as digital lending and payments expand across the region.
The name Sea, by the way, is an acronym for SouthEast Asia.
Looking ahead, the company is expected to almost double earnings per share between 2025 and 2027.
Our company has reached a stage where we can pursue growth opportunities while improving profitability.
Founder and CEO Forrest Li
3. Valuation
At first glance, Sea stock looks very expensive. Itâs trading at 98 times trailing earnings.
However, as mentioned, the firm is ramping up profits at a fair old clip. Looking further out to 2027, the forward earning multiple drops to around 31.
Of course, risks remain. Competition from Alibabaâs Lazada in Southeast Asia, MercadoLibre in Brazil, and even TikTok Shop is intensifying.
Any slowdown in consumer spending, worsening tariffs, or an economic slowdown, could also hit e-commerce volumes.
However, I think the longer I intend to own shares, the more the valuation makes sense. My ideal holding period is five to 10 years.
4. Founder-led
Sea is run by co-founder and CEO Forrest Li, who has steered the company from start-up to emerging powerhouse.
Heâs proven adept at refocusing on profitability when needed, without damaging long-term growth.
This adaptability is a key reason Iâm optimistic.
5. Multiple growth engines
Finally, I like that Sea isnât a one-trick pony. Shopee is growing rapidly, while management says that Free Fire has âestablished itself as an evergreen franchiseâ.
Sea is exploring ways to push the boundaries of gaming by incorporating artificial intelligence.
Meanwhile, Moneeâs credit business is still in the very early stages across Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
What we have here then is a vast addressable market, surging profitability, a reasonable valuation on a forward-looking basis, and quality founder-led management.
As such, Iâm very tempted to rebuy this stock, and think it deserves a place on growth investorsâ radars today.
The post 1 world-class growth firm Iâm tempted to buy for my Stocks and Shares ISA appeared first on The Motley Fool UK.
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Ben McPoland has positions in MercadoLibre. The Motley Fool UK has recommended MercadoLibre and Sea Limited. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
