Singapore tech company Sea Limited (NAS100:SE) releases its latest earnings this week as the stock looks for a low in the price.
SE – Daily Chart
The price of SE has been on a heavy downfall recently, and the earnings release has potential for a low at the July-August support.
Sea Limited releases its latest earnings report on Tuesday morning, and analysts will be looking for an improvement. The company has underperformed analysts’ expectations in three of the last four reports by -9.7% to -17.24%. The previous quarter saw the company deliver 0.65 earnings per share on expectations of 0.72, and the upcoming report has an estimate of 0.75. A higher number could reinvigorate the stock after the recent slump.
The stock is still higher by more than 45% this year and is flat over the last 3 months, so it could be a value opportunity for investors to jump on.
The company’s Shopee brand is expected to impact Sea Limited’s performance in Q3 positively. Management said that Gross Merchandise Value (GMV) grew 25% year over year in the first half. The e-commerce arm delivered back-to-back record quarters and marked its fifth year in Brazil as the market leader by order volume.
SeaMoney’s loan book expansion and consistent credit quality are expected to have supported Sea Limited’s performance in the recent quarter. The fintech arm’s loan portfolio reached approximately $6.9 billion, reflecting nearly 90% year-over-year growth, while maintaining a stable 90-day non-performing loan ratio of around 1.0%.
The Garena gaming division delivered strong momentum in the first half of the year, driven by multiple titles achieving double-digit growth. These included Free Fire, Arena of Valor, EA Sports FC Online and Call of Duty: Mobile. Free Fire has a huge global player base, with an average of 100 million daily active users. Garena’s recent push into new genres, markets and AI-driven gaming is likely to have strengthened user acquisition and long-term growth opportunities.
However, Sea Limited’s continued focus on expanding its e-commerce and fintech businesses led to significantly higher operating expenses. Sales and marketing expenses surged nearly 30% year over year to about $1.0 billion in the previous quarter, reflecting aggressive investments in customer acquisition and market penetration.
After making these moves, the company may be closer to reducing expenses and returning to more profitable ways.
