Singapore-based internet services company Sea Limited (SE) early Tuesday reported third quarter earnings beat expectations, with a stronger-than-expected 31% revenue increase. Sea stock jumped following the report.
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This Stock Could Be The Next Chipotle. But Can It Maintain Stellar Earnings Growth?
Before Tuesday’s market open published before regular trading hours, Sea said that it earned 24 cents per share adjusted on sales of $4.3 billion for the September-ended quarter. Analysts polled by FactSet projected Sea earnings of 23 cents per share on sales of $4.1 billion. Some estimates placed expectations for Sea’s EPS at 26 cents.
For the same period a year earlier, Sea lost 26 cents per share on sales of $3.3 billion.
The 31% year-over-year revenue gain was the best in years.
Sea’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was $521.3 million, the company said, compared to estimates of $491 million, according to FactSet.
Sea’s holdings include the e-commerce focused Shopee, which services Southeast Asia and Taiwan. The company also owns digital-payments provider SeaMoney and Garena, a global online games developer known for the battle royale game Free Fire.
Sea Chief Executive Forrest Li offered positive commentary on each of the three businesses.
“Shopee is on track to deliver our full year guidance of mid-twenties year-on-year GMV(gross merchandise value) growth,” Li said in a news release. “SeaMoney’s loan book grew by over 70% year-on-year this quarter, while maintaining a stable NPL ratio. And for Garena, we now expect Free Fire’s full year bookings to grow over 30% year-on-year.”
More earnings coverage to come.
Sea Stock
In premarket trading on the stock market today, U.S.-listed Sea stock is up 6.7% at 104in recent action, signaling a two-year high.
Prior to earnings, Sea gained 4.2% Monday. Shares jumped up from their 10-week moving average and also retook Sea’s 21-day line. That offered an early entry but the looming earnings made that extremely risk.
Sea stock is set to clear a three-weeks-tight pattern with an entry point at 101.93, according to MarketSurge.
Sea More Than Doubles This Year
Sea stock has rocketed to a 120% gain this year as of Nov. 11. The company has been helped by growing investor confidence its Shopee business can fend off challenges from online retailers based in China, including Alibaba Group‘s (BABA) AliExpress, PDD Holdings‘ (PDD) Temu and TikTok Shop.
Sea has bounced back from a rough 2023 when it lost 22% of its value. But shares are still well below highs of near 372 it reached late in 2021, when Sea stock was a pandemic favorite.
Coming into the report, Sea stock had an IBD Composite Rating of 73 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Further, Sea’s IBD Relative Strength Rating was 96 out of 99. The RS Rating means that Sea has outperformed 96% of all stocks in IBD’s database over the past year.
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