Sea Limited ($SE) Earnings (Q2 FY22)

 Sea Limited ($SE) Earnings and Opinion:


Sea Limited is a company in the Consumer Cyclical sector and operates in the Internet Retail industry. The company engages in the digital entertainment, e-commerce, and digital financial service business internationally. Sea Limited was incorporated in 2009 and is currently headquartered in Singapore. The company made its debut on the stock market in 2017.

Sea Limited Earnings Results:

  • Revenues of 2.94B missing expectations of $2.98B
  • Adjusted EBITDA of -$506M missing expectations of -$485M
  • EPS of -$1.03 missing expectations of -$1.01
Opinion:
Sea Limited is currently getting hammered today, as they reported earnings before the market opened this morning. The company missed expectations on a lot of metrics in the earnings report. They are battling tough macro conditions just like every company currently. The company is trying to strive for long-term profitability and retention of business. They are doing a solid job, but it hasn't translated, especially with the tech stocks getting hammered these past couple months. We are starting to see a transition with inflation easing and steam starting to shift from a bear market to a bull market. These lackluster earnings results don't amount to much because they don't contend with similar companies earnings. It seems that this business is in a tough area geographically with economic restrictions being so tight. However, the potential is pretty solid for them. I like the optimism of the executives and they seem to be working as hard as possible to improve growth efficiency. They were able to beat expectations in the Digital Entertainment and Digital Financial Services categories, which can be as a positive. Except the guidance given for this fiscal year was not so hot. It is pretty obvious of why the stock is getting slashed today. As far as valuation goes, P/S ratio is 3.57 which is similar to industry averages. Annual revenue growth looks decent but needs to be stronger for them to achieve profitability in a timely manner. They have more cash than debt, which is an important key for them to get to that long-term profitability goal. In my opinion, I am going to stay out of this one. I do not know enough about the markets they serve and how those economies are working. I know they are heavily regulated and it could be awhile for Sea Limited to perform they way I want. I think I am better off investing in a tech company based out of the United States that I know a little bit more about.


*Information from Yahoo Finance, CMLVIZ, Consensus Guru

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