- Sea Limited releases its latest earnings on Monday ahead of the US session.
SE – Daily Chart
SE has found support at the $40.81 level and will look for a push to resistance ahead of $70 on the NYSE-listed ADR.
Sea investors have been treated to a strong revival since SE’s Q3 post-earnings crash in November 2023. While SE underperformed the S&P 500, the price drop was defended by investors and has posted a strong turnaround.
Investors are now anticipating more optimistic guidance from management at Sea Limited’s fourth-quarter earnings release on March 4. The company has faced competitive headwinds from TikTok’s owner, ByteDance. Sea’s revenue drivers are still primarily based on the success of its investments in its e-commerce platform, Shopee. The company’s Garena gaming unit has also added to profitability. Sea Money, the fintech arm of the group, remains an exciting long-term prospect. That segment is likely to have grown due to the diversification of its overall service and products, reaching a broader user base—an estimate for fourth-quarter 2023 projects digital financial services revenues to be $476 million.
Sea management decided that Sea needed to invest more aggressively in Shopee during its Q3 earnings report, which could be seen in the Q4 financials.
Analysts expect the company to report a quarterly loss of 27 cents per share versus year-ago earnings of 72 cents per share. Expected revenue of $3.55 billion for the latest quarter would be higher than $3.45 billion a year earlier.
Analysts have been adjusting ahead of the earnings, with DBS Bank downgrading the stock from Buy to Hold with a price target of $42. Wedbush analyst Scott Devitt keeps an Outperform rating with a price target of $48 set back in Sept. 2023, and the analyst has an accuracy rate of 82%.
Sea Limited is still expected to be the e-commerce leader in Southeast Asia, while Shopee can still scale up. Rival Alibaba is in the middle of a significant reorganisation under new CEO Eddie Wu; Lazada has been cutting jobs as China’s e-commerce leader looks to rejuvenate its growth plans. As such, SE can hold onto this support level in the stock and push for the resistance ahead of $70.
