Stock of the Day

October 21, 2019

SEA (SE)

$128.70
-$4.13 (-3.1%)
Market Cap: $76.02B

About SEA

Sea Ltd. is an internet and mobile platform company, which engages in the provision of online gaming services. It operates through the following segments: Digital Entertainment, E-Commerce, and Digital Financial Services. The Digital Entertainment segment offers and develops mobile and PC online games. The E-Commerce segment manages a third-party marketplace through the Shopee mobile app and websites that connect buyers and sellers. The Digital Financial Services segment includes a variety of payment services and loans to individuals and businesses through SeaMoney. Sea was founded by Xiao Dong Li, Gang Ye, and Jing Ye Chen on May 8, 2009 and is headquartered in Singapore.

SEA Bull Case

Here are some ways that investors could benefit from investing in Sea Limited:

  • Sea Limited has shown significant revenue growth, with a reported increase of 30.8% year-over-year, indicating strong demand for its services and potential for future profitability.
  • The company's stock price is currently at $123.00, reflecting a positive market sentiment and potential for capital appreciation.
  • Institutional investors hold 59.53% of Sea Limited's stock, suggesting confidence from large financial entities in the company's future performance.
  • Recent earnings reports indicate that Sea Limited is expanding its market presence, with revenues surpassing analyst expectations, which can lead to increased investor confidence.
  • Analysts have set optimistic price targets for Sea Limited, with several firms upgrading their ratings and target prices, indicating a bullish outlook for the stock.

SEA Bear Case

Investors should be bearish about investing in Sea Limited for these reasons:

  • Despite revenue growth, Sea Limited reported earnings per share of $0.24, which missed analysts' consensus estimates of $0.59, raising concerns about its profitability.
  • The company has a high P/E ratio of 820.01, which may indicate that the stock is overvalued compared to its earnings, posing a risk for potential investors.
  • Sea Limited's net margin is relatively low at 0.64%, suggesting that the company may face challenges in converting revenue into profit.
  • The stock has experienced volatility, with a twelve-month high of $126.35 and a low of $41.60, indicating potential risks associated with price fluctuations.
  • Analysts have mixed ratings, with one sell rating and two hold ratings, which may signal uncertainty about the stock's future performance.

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