SE

Sea Limited

56.05
USD
4.51%
56.05
USD
4.51%
52.38 372.70
52 weeks
52 weeks

Mkt Cap 22.42B

Shares Out 399.98M

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Why Sea Limited Stock Sank 6% Today

What happened Shares of Singapore-based e-commerce, payments, and online gaming company Sea Limited (NYSE: SE) closed down 6.4% on Wednesday, one day after news of an earnings beat (but a revenue miss) for the company's fiscal second quarter 2022 sent the stock down 14% in a single day. So what Wall Street kind of piled onto the Sea Limited selling spree today, with three separate investment banks -- Bank of America, Citigroup, and Stifel Nicolaus -- all cutting their price targets on the stock. Adding insult to injury, Daiwa Securities cut its price target by $30, to $80, and also downgraded Sea Limited stock to "hold." That's the bad news. The good news is that Daiwa's was the only downgrade Sea suffered today, and while BofA and Citi -- and Stifel as well -- did cut their price targets, according to ratings news reporter TheFly, each of these latter three investment banks still maintains a "buy" rating on Sea stock. As Bank of America noted, Sea's losses were worse than expected, but its revenues and gross profit margins at least beat expectations. And longer term, in this banker's view, Sea remains "well placed to dominate" e-commerce in Southeast Asia. Now what Speaking of the long term, at least one of the analysts commenting today -- Citi -- raised concerns over Sea Limited's decision to suspend revenue guidance as it shifts its focus to "long-term strength and profitability." That's not necessarily a bad thing, however; in fact, Sea did beat analyst expectations for earnings in Q2, reporting a loss of $1.03 per share instead of the $1.19 per-share loss that Wall Street had anticipated. Yet a loss is still a loss, even if it wasn't quite as big a loss as expected. And while long-term investors may be encouraged by the company's shifting its focus away from growth for its own sake, and toward growth for the sake of eventually earning profits, profitability still looks a ways away for Sea. According to the consensus of analysts polled by S&P Global Market Intelligence, Sea won't earn its first profit before 2025 at the earliest. Until that happy day arrives, even long-term investors are probably going to have to depend on reports of sales growth to provide good news (and good stock market returns for Sea stock). For these investors, the announcement that Sea is eschewing sales guidance is probably going to come as a disappointment. 10 stocks we like better than Sea Limited When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and Sea Limited wasn't one of them! That's right -- they think these 10 stocks are even better buys. *Stock Advisor returns as of July 27, 2022 Citigroup is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Sea Limited. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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