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Sea Limited (SE) to Report Q1 Earnings: What's in Store?

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Sea Limited (SE - Free Report) is set to release first-quarter 2020 results on May 18.

The Zacks Consensus Estimate for loss has been unchanged at 34 cents per share over the past 30 days. Sea Limited reported loss of 64 cents per share in the year-ago quarter.

Moreover, the consensus mark for revenues is currently pegged at $920.9 million, indicating 59.1% growth from the year-ago quarter’s reported figure.

The company’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average being 30.1%.
 

Sea Limited Sponsored ADR Price and EPS Surprise

Sea Limited Sponsored ADR Price and EPS Surprise

Sea Limited Sponsored ADR price-eps-surprise | Sea Limited Sponsored ADR Quote

 

Let’s see how things shaped up prior to this announcement.

Factors at Play for Q1 Results

Sea Limited’s digital entertainment (Garena) and ecommerce businesses are expected to have capitalized on the coronavirus outbreak in the first quarter.

Garena is likely to have benefited from the continued popularity of Free Fire. Per Sensor Tower data, it was the sixth most downloaded mobile game in March, globally.

The game’s meteoric fame can be attributed to school closures amid lockdowns and social distancing.

Further, Sea Limited partnered with Activision and Tencent to launch the hugely popular Call of Duty: Mobile in Southeast Asia and Taiwan, which already received an overwhelming response from gamers. This enthusiasm is likely to have positively impacted the company’s first-quarter results.

Moreover, the company’s e-commerce segment is likely to have gained traction from a strong uptick in Shopee, its online shopping platform.

Gross orders totaled 440.5 million, up 112.9% year over year in the fourth quarter of 2019, a trend that most likely continued in the to-be-reported quarter.

However, the rising incidence of coronavirus cases in Singapore, Indonesia and Philippines is expected to have hurt ecommerce operations.

Additionally, increasing operating expenses are expected to have dented profitability.

What Our Model Indicates

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Sea Limited has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering from the same sector as our model shows that these have the right combination of elements to beat on earnings this reporting cycle:

Nutanix (NTNX - Free Report) has an Earnings ESP of +1.68% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Anaplan (PLAN - Free Report) has an Earnings ESP of +3.70% and is Zacks #1 Ranked. 

Take Two Interactive (TTWO - Free Report) has an Earnings ESP of +13.24% and a Zacks Rank #2.


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