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Sea Limited (SE) Down 9.5% Since Earnings Report: Can It Rebound? (Revised)

Zacks Equity Research
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Wells Fargo (WFC) Lags Q3 Earnings Estimates

Wells Fargo (WFC) delivered earnings and revenue surprises of -3.42% and 0.20%, respectively, for the quarter ended September 2018. Do the numbers hold clues to what lies ahead for the stock?

It has been more than a month since the last earnings report for Sea Limited SE. Shares have lost 9.5% in that in that time frame, underperforming the market.

Will the recent negative trend continue leading up to its next earnings release, or is SE due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Sea Limited’s Q4 Loss Widens Despite Higher Revenues

Sea Limited reported mixed results for fourth-quarter 2017, wherein the top-line surpassed the Zacks Consensus Estimate but the bottom line missed the same. Similarly, on a year-over-year basis, the company’s revenues marked significant improvement, yet it incurred wider loss due to elevated costs and expenses.

The company reported net loss of $263.1 million, reflecting an increase of over three folds when compared with the year-ago quarter’s net loss of $72.2 million. The benefits of increased revenues were more than offset by elevated costs and expenses. On a per share basis, the company reported loss of 90 cents, wider than the year-ago quarter’s loss of 42 cents. The Zacks Consensus Estimate for the quarter was pegged at a loss of 66 cents.

The company’s fourth-quarter revenues jumped approximately 41% year over year to $124.6 million and came ahead of the Zacks Consensus Estimate of $110 million. Sea Limited registered growth across all of its markets.

How Have Estimates Been Moving Since Then?

Fresh estimates followed an upward path over the past two months.

Sea Limited Sponsored ADR Price and Consensus

Sea Limited Sponsored ADR Price and Consensus | Sea Limited Sponsored ADR Quote

VGM Scores

At this time, SE has a poor growth and momentum score of F. Following the exact same course, the stock was also allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate investors will probably be better served looking elsewhere.

Outlook

SE has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

(We are reissuing this article to correct a mistake. The original article, issued on Mar 29, 2018, should no longer be relied upon.)


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