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Sea Limited (SE) to Report Q1 Earnings: What's in Store?

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Sea Limited SE is set to release first-quarter 2021 results on May 18.

The Zacks Consensus Estimate for loss has been unchanged at 39 cents per share over the past 30 days. Sea Limited reported a loss of 52 cents per share in the year-ago quarter.

Moreover, the consensus mark for revenues is currently pegged at $2.07 billion, indicating 126.3% growth from the year-ago quarter’s reported figure.

The company’s earnings missed the Zacks Consensus Estimate in all of the trailing four quarters, the negative earnings surprise being 28.11%.

Sea Limited Sponsored ADR Price and EPS Surprise

Sea Limited Sponsored ADR Price and EPS Surprise
Sea Limited Sponsored ADR Price and EPS Surprise

Sea Limited Sponsored ADR price-eps-surprise | Sea Limited Sponsored ADR Quote

Let’s see how things have shaped up prior to this announcement.

Factors at Play for Q1 Results

Sea Limited’s digital entertainment (Garena) and e-commerce businesses are expected to have continued to capitalize on the coronavirus outbreak and the holiday season in the first quarter.

Garena is likely to have benefited from the continued popularity of Free Fire. Per Sensor Tower data, the game was the eighth top-grossing mobile game worldwide in March 2021. It was also the third most-downloaded game in March 2021.

In fact, Free Fire overtook PUBG Mobile from Tencent TCEHY and Activision’s ATVI Call of Duty: Mobile as the top mobile Battle Royale game by player spending in the United States during first-quarter 2021.

Garena Free Fire generated roughly revenues of $100 million, up 4.5% year over year, per Sensor Tower data.

Moreover, the company’s e-commerce segment is likely to have gained traction from a strong uptick in Shopee, its online shopping platform. Additionally, SeaMoney’s strengthening integration with Shopee is expected to have aided Sea’s digital financial services business.

However, higher expenses related to the expansion of e-commerce services, and continued efforts to integrate the company’s mobile wallet services with the Shopee platform across different markets, are expected to have negatively impacted profitability in the to-be-reported quarter.

What Our Model Indicates

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Sea Limited has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

A Key Stock to Consider

Here is a company worth considering as our model shows that it has the right combination of elements to beat on earnings this reporting cycle:

NVIDIA NVDA has an Earnings ESP of +2.11% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

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NVIDIA Corporation (NVDA) : Free Stock Analysis Report

Activision Blizzard, Inc (ATVI) : Free Stock Analysis Report

Sea Limited Sponsored ADR (SE) : Free Stock Analysis Report

Tencent Holding Ltd. (TCEHY) : Free Stock Analysis Report

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