SE is expected to report a quarterly result on May 18
Sea Limited (NYSE: SE) is a global consumer internet company headquartered in Singapore. Sea operates three core businesses in digital entertainment, e-commerce, and digital payments and financial services. Sea Limited businesses include Garena, Shopee and SeaMoney. Garena is a global online game developer and publisher. This afternoon, SE is trading 1.1% at $ 219.15.
Earlier this month, Sea Limited announced plans to release first quarter results ahead of market opening tomorrow, May 18th. SE has swung and missed Wall Street earnings expectations in all four of its most recent earnings reports.
For the first quarter of 2020, Sea Limited missed analysts’ estimates by a margin of $ 0.16 and reported earnings per share (EPS) of – $ 0.52. For the second quarter of 2020, SE reported a drop in earnings to – $ 0.68 per share, falling short of expectations with a margin of $ 0.27. For the third quarter of 2020, Sea Limited posted another drop in earnings, which dropped to $ 0.69 per share and was missing estimates of a margin of $ 0.16. For the final quarter of 2020, Sea reported earnings per share of – $ 0.87, falling short of expectations with a margin of $ 0.33. For tomorrow’s results, analysts expect a quarterly loss of 0.53.
The ocean stock price is up 251% year over year, around the same time it bottomed $ 65.43 on May 18. The shares of SE have also grown by 10% since the beginning of the year. However, Sea Limited stock is trading around 24% from its record high in February of $ 285.00. The long-term rise in the stock was supported by the 50-day and 160-day moving averages.
Basically, Sea Limited’s biggest problem is its lack of profitability. For 2020, Sea Limited recorded a net loss of $ 1.62 billion, a decrease of $ 160 million from 2019 and a decrease of $ 1.06 billion over the past three years. Still, Sea Limited stock remains a promising growth game given its massive sales growth. In 2020, Sea Limited managed to double its sales and have total sales of approximately $ 4.4 billion.
In general, any company that exponentially increases its sales, as is currently the case with Sea Limited, is always trading at inflated stock prices. SE is currently valued at $ 112.6 billion. In addition, Sea Limited stock will continue to be a high risk, high reward stock game until the company proves it can make profits from massive revenues.
The good news for options traders is that Sea stock has tended to outperform volatility expectations over the past 12 months. This is based on his Schaeffer’s Volatility Scorecard (SVS) of 87 of 100.