Sea Posts Mixed Q3 Results; Shares Drop


Sea Limited (SE) has posted mixed results for the third quarter of 2021. Following the news, shares of the Singapore-based consumer internet company lost 1.2% in the extended trading session on Tuesday, after closing 3.8% lower on the day.

Results in Detail

Sea reported a net loss of $0.84 per share against the Street’s loss estimate of $0.68 per share. The company had reported a loss of $0.69 per share in the same quarter last year.

Meanwhile, total revenues of $2.69 billion rose 121.8% year-over-year and surpassed analysts’ expectations of $2.39 billion. The strong performance of Digital Entertainment, along with e-commerce and other services, drove the overall results.

Revenues from Digital Entertainment increased 93.2% year-over-year to $1.1 billion. Bookings rose 29.2% year-over-year to $1.2 billion, and quarterly active users (QAUs) stood at 729 million, up 27.4% from the same quarter last year.

E-commerce revenue stood at $1.5 billion during the quarter, representing a rise of 134.4% year-over-year. Similarly, gross merchandise value (GMV) was up 80.6% to $16.8 billion.

During the quarter, the company witnessed strong growth in the adoption of SeaMoney’s offerings. The total payment volume for the mobile wallet came in at $4.6 billion, up 111% year-over-year. Additionally, quarterly paying users for mobile wallet services rose to 39.3 million.

Meanwhile, adjusted EBITDA was a negative $165.5 million, compared to $120.4 million in the prior-year period.

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Outlook

For 2021, the company expects revenue for e-commerce to be between $5 billion and $5.2 billion, representing 135.3% year-over-year growth at the midpoint of the revised guidance, compared to the previous guidance range of $4.7 billion to $4.9 billion. (See Sea stock charts on TipRanks)

Analysts Recommendation

Following the third-quarter results, Bank of America Securities analyst Sachin Salgaonkar downgraded the stock to Hold from Buy but increased the price target to $385 (16.7% upside potential) from $380.

The analyst noted that the company’s gaming guidance indicates slowing Q4 growth. Further, Salgaonkar foresees the company’s risk/reward as balanced following its year-to-date price performance.

Shares have rallied 93.4% over the past year. Overall, the Street is bullish on the stock and has a Strong Buy consensus rating based on 13 Buys and 1 Hold. The average Sea price target of $390.47 implies 18.4% upside potential to current levels.

Bloggers Weigh In

TipRanks data shows that financial blogger opinions are 97% Bullish on SE, compared to a sector average of 70%.

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