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Sea Limited Stock Surges 100.6% YTD: Will the Bull Run Continue?
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Sea Limited’s (SE - Free Report) shares have surged 100.6% year to date compared with the Zacks Computer & Technology sector’s rise of 21.7%.
The rise in stock price reflects investors’ confidence in SE’s portfolio strength and cost-management initiatives.
However, the question the investors should now ask whether this bull run will continue for Sea Limited shares or not?
SE Shares Rides on Decent Q2 Earnings
Sea Limited reported decent second-quarter 2024 financial results, with revenues increasing 23% year over year to $3.8 billion. The uptick is primarily driven by growth in its core businesses, which include e-commerce (Shopee), digital financial services (SeaMoney) and digital entertainment (Garena).
Shopee, Sea Limited’s e-commerce platform, continued to register strong growth with gross orders increasing 40% and Gross Merchandise Value (GMV) rising 29% year on year in second quarter of 2024.
Shopee’s impressive performance was further supported by improvements in Shopee’s logistics operations, particularly SPX Express. The logistics arm enhanced delivery speed and reduced costs, with more than 70% of SPX Express orders being delivered within three days and an 8% year-on-year reduction in cost per order.
Shopee’s advertising efforts saw a positive impact. The ad take rate improved as more sellers engaged with the ad platform, leading to a 20% year-on-year increase in sellers paying for ads. The introduction of Live Ads also contributed positively to the upside.
SE Stock’s Prospect Rides On Expanding Portfolio
Sea Limited’s expanding portfolio has been a major growth driver of its success. In the second quarter of 2024, its digital financial services arm, SeaMoney, saw its loan book rise to $3.5 billion by almost 40% year on year, with the number of active consumer and SME loan users increasing by nearly 60%.
Digital entertainment also contributed to SE’s growth, with a 21% year-on-year increase in bookings to $537 million.
Garena, one of its flagship offerings, registered a 20% year-over-year increase in bookings. Free Fire, one of its flagship games, remained one of the largest mobile games globally, with more than 100 million Daily Active Users (DAU). The game continued to engage players with regular content updates, new features and in-game events.
In the second quarter, SE also announced that it is set to launch Need for Speed: Mobile in collaboration with Tencent (TCEHY - Free Report) and Electronic Arts (EA - Free Report) .
The partnership with Tencent and Electronic Arts is expected to significantly enhance SE’s digital entertainment offerings and market presence.
SE’s Earnings Estimates Show Upward Movement
SE’s robust portfolio across its core segments is helping it to expand its clientele and is expected to drive its top-line growth in the days ahead.
The Zacks Consensus Estimate for third-quarter 2024 revenues is currently pegged at $4.05 billion, suggesting 17.10% growth over the figure reported in the year-ago quarter.
The consensus mark for earnings is currently pegged at 59 cents, up by a couple of pennies in the past 30 days.
SE Shares are Overvalued
SE stock is not so cheap, as the Value Score of C suggests a stretched valuation at this moment.
In terms of Price/Book ratio, SE is trading at 6.68X, higher than the Zacks Internet Software industry’s 2.85X.
SE currently carries Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock.
Image: Shutterstock
Sea Limited Stock Surges 100.6% YTD: Will the Bull Run Continue?
Sea Limited’s (SE - Free Report) shares have surged 100.6% year to date compared with the Zacks Computer & Technology sector’s rise of 21.7%.
The rise in stock price reflects investors’ confidence in SE’s portfolio strength and cost-management initiatives.
However, the question the investors should now ask whether this bull run will continue for Sea Limited shares or not?
SE Shares Rides on Decent Q2 Earnings
Sea Limited reported decent second-quarter 2024 financial results, with revenues increasing 23% year over year to $3.8 billion. The uptick is primarily driven by growth in its core businesses, which include e-commerce (Shopee), digital financial services (SeaMoney) and digital entertainment (Garena).
Sea Limited Sponsored ADR Price and Consensus
Sea Limited Sponsored ADR price-consensus-chart | Sea Limited Sponsored ADR Quote
Shopee, Sea Limited’s e-commerce platform, continued to register strong growth with gross orders increasing 40% and Gross Merchandise Value (GMV) rising 29% year on year in second quarter of 2024.
Shopee’s impressive performance was further supported by improvements in Shopee’s logistics operations, particularly SPX Express. The logistics arm enhanced delivery speed and reduced costs, with more than 70% of SPX Express orders being delivered within three days and an 8% year-on-year reduction in cost per order.
Shopee’s advertising efforts saw a positive impact. The ad take rate improved as more sellers engaged with the ad platform, leading to a 20% year-on-year increase in sellers paying for ads. The introduction of Live Ads also contributed positively to the upside.
SE Stock’s Prospect Rides On Expanding Portfolio
Sea Limited’s expanding portfolio has been a major growth driver of its success. In the second quarter of 2024, its digital financial services arm, SeaMoney, saw its loan book rise to $3.5 billion by almost 40% year on year, with the number of active consumer and SME loan users increasing by nearly 60%.
Digital entertainment also contributed to SE’s growth, with a 21% year-on-year increase in bookings to $537 million.
Garena, one of its flagship offerings, registered a 20% year-over-year increase in bookings. Free Fire, one of its flagship games, remained one of the largest mobile games globally, with more than 100 million Daily Active Users (DAU). The game continued to engage players with regular content updates, new features and in-game events.
In the second quarter, SE also announced that it is set to launch Need for Speed: Mobile in collaboration with Tencent (TCEHY - Free Report) and Electronic Arts (EA - Free Report) .
The partnership with Tencent and Electronic Arts is expected to significantly enhance SE’s digital entertainment offerings and market presence.
SE’s Earnings Estimates Show Upward Movement
SE’s robust portfolio across its core segments is helping it to expand its clientele and is expected to drive its top-line growth in the days ahead.
The Zacks Consensus Estimate for third-quarter 2024 revenues is currently pegged at $4.05 billion, suggesting 17.10% growth over the figure reported in the year-ago quarter.
The consensus mark for earnings is currently pegged at 59 cents, up by a couple of pennies in the past 30 days.
SE Shares are Overvalued
SE stock is not so cheap, as the Value Score of C suggests a stretched valuation at this moment.
In terms of Price/Book ratio, SE is trading at 6.68X, higher than the Zacks Internet Software industry’s 2.85X.
SE currently carries Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock.
AEYE is a Top-Ranked Stock to Buy
AudioEye (AEYE - Free Report) is a better-ranked stock in the broader sector, sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
AudioEye’s shares have skyrocketed 311.8% in the year-to-date period. The long-term earnings growth rate for AEYE is pegged at 25%.