Sea Limited (SE): Accelerating Into a Derating — Valuation + Pair Comparison vs eBay (EBAY)

1. Head-to-Head: Same Enterprise Size, Opposite Pricing

Metric	SE	EBAY
Price (verified)	$85.69 (Jun 11)	$106.41 (Jun 10)
Market cap	$48.6B	$47.9B
Enterprise value	approx $45.0B	approx $49.1B
Revenue (TTM)	$25.2B	$11.6B
Net income (FY25, GAAP)	$1.58B	$2.03B
SBC (FY25, % of revenue)	$625M (2.5%)	$607M (5.2%)
EV / Revenue (TTM)	1.79x	4.23x
EV / FCF (FY25)	10.0x	29.6x
EV / owner FCF (FCF − SBC)	11.6x*	46.6x
P/E trailing / forward	33.4x / 29.2x	25.2x / 18.0x
Revenue growth (Q1 2026)	+46.6%	+19.5% (FY guide +7–7.5% GMV)
GAAP operating margin	8.4%	19.8%
Employees (Dec 31, 2025)	102,700	12,300
Revenue per employee (TTM)	approx $245K	approx $943K
vs 52-week range	−57% from $199.30 high	near $118.98 high

*SE’s operating cash flow is flattered by Monee deposit inflows; on a haircut clean FCF of $3.0–3.5B, EV/FCF is approximately 13–15x — still one-third of eBay’s. SE EV uses the conservative end of a $41.6–45.0B range pending 20-F line-item verification of the convertible and Monee deposit stack. eBay EV: $47.9B cap + $7.08B debt incl leases − $5.87B cash and investments (Q1-26 10-Q). Headcounts per FY2025 10-K (eBay) and SEC filings (Sea); Sea’s 8x larger workforce reflects in-house Shopee logistics and SeaBank operations versus eBay’s asset-light marketplace — the structural driver of the revenue-per-employee gap.

The P/E line is the only optic favoring eBay, and it is mechanical: SE’s margins are early-cycle and suppressed by front-loaded credit provisioning (expense today, loans earn later), while eBay’s trailing P/E is flattered by a 13.5% effective-tax year. EV/FCF is the honest lens, and it is not close.

2. SE: What the Market Is Selling

Q1 2026 revenue reached approximately $7.1B, up 46.6% year over year — the fastest in 16 quarters — with Shopee GMV up approximately 30% at record highs and Garena posting its strongest quarter since 2021. The stock nonetheless sits near its 52-week low because both the Q4 (Mar 3) and Q1 (May 13) prints paired revenue beats with EPS misses: Shopee VIP subsidies (over 10 million members, Indonesia renewal rates lifted from approximately 40% to 70% via Monee payment rails) drove Shopee adjusted EBITDA down 15.5% year over year, and Monee credit-loss provisions rose 65% to $465.5M as the loan book grew approximately 70% to $9.9B. NPL ratio held at 1.1%. Management guided approximately 25% Shopee GMV growth for 2026 with adjusted EBITDA no lower than 2025’s $881M — an explicit investment year.

Two cautions logged: COO and CCO open-market share sales on May 12–13 immediately after the Q1 print (an insider anti-pattern), and the macro overlay — a consumer loan book compounding at 70% across Southeast Asia and Brazil (Brazil past $1B, up over 250%) is the textbook transmission channel if EM consumption rolls over in a stagflation regime. That is why the bear scenario below carries a 30% weight.

3. SE Three-Scenario DCF

WACC 12.0% (rf 4.45%, relevered beta 1.40, ERP 5.8% including Southeast Asia / Brazil country risk weighting), tax 20%, reinvestment 35% declining to 25%, GAAP EBIT base with SBC expensed.

Scenario	Weight	Revenue path	Yr-5 margin	FV
Bull — MercadoLibre path; Garena cash cow; Monee scales cleanly	25%	35% → 15%	19%	$135
Base — guide delivered, margin grind, provisions normalize	45%	30% → 12%	15%	$88
Bear — SEA/Brazil credit cycle; provisions blow through 1.1% NPL; subsidy war persists	30%	18% → 6%	10%	$42
Probability-weighted fair value				$86

Reverse DCF: $85.69 embeds approximately 18.6% annual revenue growth for five years with margins reaching 15%. The company is currently growing at 47% and guiding Shopee GMV at 25%. The market’s implied bar sits far below delivery; the gap is the credit-risk premium. On benign-credit weights (30/50/20), PWFV moves to approximately $98–100.

4. EBAY: Pricing the Bull Case Plus a Rejected Bid

eBay’s Q1 was genuinely strong — revenue $3.09B up 19.5%, GMV $22.2B up 14%, US GMV up 27% — powered by collectibles: the Pokémon 30th-anniversary surge across the core marketplace, eBay Live, TCGplayer, and Goldin (which auctioned a Pikachu Illustrator for over $16M, the most valuable card ever sold). But management itself flagged the demand normalizing late in Q1, guided Q2 GMV down to 8–10%, and set full-year GMV at just 7–7.5%. GAAP operating margin compressed from 23.8% to 19.8% as growth was bought with marketing.

The GameStop overlay: a $125/share cash-and-stock proposal (May 3, approximately $55.5B) was rejected by the board on May 12 as “neither credible nor attractive,” with the TD financing letter non-binding and conditional on an investment-grade rating — implausible at the implied leverage. Ryan Cohen cleared HSR June 3, lifted GameStop’s economic stake to approximately 9% (direct shares plus put/call pairs struck $84.74–$118.28 on approximately 43.6M shares), and has threatened to go directly to shareholders. The undisturbed price was approximately $104, so today’s $106.41 carries almost no deal premium — the price is the collectibles re-rating itself.

EBAY scenario	Weight	Revenue path	Terminal margin	FV
Bull — collectibles boom structural	25%	11% → 7%	24%	$86
Base — guide plus decay	50%	10% → 4%	22%	$66
Bear — card cycle rolls over in 2027; Fanatics Collect / GameStop Power Packs take share	25%	6% → 0 → 2%	20%	$44
Standalone PWFV (25/50/25)				$65

WACC 9.61% (rf 4.45%, Hamada-relevered beta 1.30, ERP 4.6%), tax 20%, GAAP EBIT base. Reverse DCF: $106.41 requires approximately 18% annual revenue growth for five years — roughly 2.5x management’s own GMV guide. Owner FCF check: FY25 OCF $2.19B − capex $0.53B − SBC $0.61B = $1.05B, i.e. 46x. Blending the standalone $65 with a 15–25% deal probability at an effective $112–120 (half the consideration is GameStop paper) yields $72–80.

5. The Pair, and What Breaks It

The same implied five-year growth bar (approximately 18%) sits under both stocks. SE is delivering 2.5x above it; eBay is guiding 2.5x below it. Long SE / short-or-avoid EBAY captures the spread between 46x owner FCF for decelerating growth and 12x for accelerating growth. What breaks each leg: on EBAY, a GameStop tender materializing (upside tail to $125, partially supported by dealer hedging of the 43.6M-share call structure); on SE, a Southeast Asia or Brazil consumer-credit event surfacing in the Monee NPL ratio. Both legs share correlation to the global consumer — size accordingly. Single-name alternative: own SE outright and simply do not chase EBAY.

Sources: company filings (10-K/10-Q/20-F/6-K), Q1 2026 earnings calls, SEC Schedule 13D/A (GameStop/eBay), Alpha Vantage verified quotes. Methodology: Damodaran narrative-plus-numbers; probability-weighted three-scenario DCF with reverse-DCF sanity check; WACC from first principles. SBC treated as a real cash expense throughout. This is independent research, not investment advice. Positions may exist in securities discussed.