For Now, Sea Limited Stock Is a Falling Knife

investorplace2022-01-27

Over the long term, Sea Limited (NYSE:SE) stock – propelled by the company’s strong, rapidly growing e-commerce, financial services and video game businesses – should deliver very impressive financial...

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Comments

LHC0511
2022-02-04
LHC0511
Fully agree
oklebs
2022-02-03
oklebs
Let's go
Kerrisdale
2022-02-01
Kerrisdale
Short term a falling knife.
NightKL
2022-02-01
NightKL
Not true , it's a good company , bullish for sure
Alvin1975
2022-01-30
Alvin1975
Up
Alvin1975
2022-01-30
Alvin1975
Up

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But in the short and medium term, for a variety of reasons, SE stock is likely to get little affection from the Street.Moreover, despite the huge, recent decline of the shares, their valuation remains quite elevated.Rapid Growth and a Positive Long-Term OutlookSea Limited’s three largest business – e-commerce, digital financial services, and video games – all appear to be doing very well.In the third quarter, the gross orders of its e-commerce unit soared 123% year-over-year to $1.7 billion, while its gross market volume jumped 81% to $16.8 billion. In financial services, its total payment volume climbed 111% to $4.6 billion, while the number of its paying users soared 120% from a year ago.The performance of Sea’s video game business was less impressive, but its quarterly active user base still rose 27% from a year ago to 729 million, while its bookings increased 29% to $1.2 billion and its EBITDA, excluding certain items, rose 22% to $715 million.So, despite the challenges to all of these businesses and the difficult year-over-year comparisons created by the easing of the pandemic, the growth of all three ranged from quite respectable to tremendous.Overall, Sea’s sales jumped 122% from last year,reaching $2.7 billion,while its gross profit surged 148% to $1 billion.Moreover, there are multiple signs that the company has become very adept at expanding its e-commerce business to new markets. 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Sea has both of these characteristics as well.In Q3, for example, its net loss came in at $425.26 million. While that loss was 34% better than the $571 million it shed during the same period a year earlier, the company still obviously lost a great deal of money.On two positive notes, the company’s operating expenses dropped to $713 million in Q3 from $1.45 billion in the year-earlier period, while its EBITDA, excluding certain items, climbed to positive $120.4 million from a loss of $165.45 million.Nevertheless, large investors are still likely to view Sea as an unprofitable enterprise.And on the valuation front, SE stock is changing hands for nearly 15x Sea’s trailing 12-month revenue. That’s way down from the stock’s valuation of 23.6x trailing sales as of Sept. 30, but it’s still a very high price to pay for the shares.The Bottom Line on SE StockSea is rapidly growing and has tremendous long-term potential. But as shown by the fact that its shares tumbled by 33% in the last month, it’s not a good stock to buy in the current market.As a result, rather than try to catch this falling knife, investors should wait for the market’s attitude towards names like SE stock to improve before taking a bullish position in it. Those who follow that advice will almost certainly get a better price and sleep more easily at night than those who don’t.","kind":"news","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9091571627,"gmtCreate":1643911988308,"gmtModify":1676533870527,"author":{"id":"4102601568648950","authorId":"4102601568648950","name":"LHC0511","avatar":"https://static.tigerbbs.com/36137ecfd83799ae98abc1275df51d30","vip":1,"crmLevel":3,"crmLevelSwitch":0,"idStr":"4102601568648950","authorIdStr":"4102601568648950"},"htmlText":"Fully agree","listText":"Fully agree","text":"Fully agree","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9091571627","repostId":1124110006,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9091264324,"gmtCreate":1643878935885,"gmtModify":1676533866874,"author":{"id":"4091783136376870","authorId":"4091783136376870","name":"oklebs","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"4091783136376870","authorIdStr":"4091783136376870"},"htmlText":"Let's go","listText":"Let's go","text":"Let's go","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9091264324","repostId":1124110006,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9091038379,"gmtCreate":1643728260816,"gmtModify":1676533849272,"author":{"id":"3569672085341585","authorId":"3569672085341585","name":"Kerrisdale","avatar":"https://static.tigerbbs.com/a4d14a21feeb313f6dab3cc9b67b4219","vip":1,"hat":"https://static.tigerbbs.com/f84d87792f02cf78e80ee34979fd31e5","crmLevel":8,"crmLevelSwitch":1,"idStr":"3569672085341585","authorIdStr":"3569672085341585"},"htmlText":"Short term a falling knife.&nbsp;","listText":"Short term a falling knife.&nbsp;","text":"Short term a falling knife.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9091038379","repostId":1124110006,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9093508844,"gmtCreate":1643653350244,"gmtModify":1676533840467,"author":{"id":"4091438658270050","authorId":"4091438658270050","name":"NightKL","avatar":"https://community-static.tradeup.com/news/898b031378f1546a628b3ea70b5ddbb2","vip":1,"crmLevel":4,"crmLevelSwitch":0,"idStr":"4091438658270050","authorIdStr":"4091438658270050"},"htmlText":"Not true , it's a good company , bullish for sure&nbsp;","listText":"Not true , it's a good company , bullish for sure&nbsp;","text":"Not true , it's a good company , bullish for sure","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9093508844","repostId":1124110006,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9093184685,"gmtCreate":1643556720581,"gmtModify":1676533830935,"author":{"id":"3573788625955643","authorId":"3573788625955643","name":"Alvin1975","avatar":"https://static.tigerbbs.com/beba0668af2d109b87221754e75935b3","vip":1,"crmLevel":5,"crmLevelSwitch":0,"idStr":"3573788625955643","authorIdStr":"3573788625955643"},"htmlText":"Up","listText":"Up","text":"Up","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9093184685","repostId":1124110006,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9093184866,"gmtCreate":1643556712791,"gmtModify":1676533830934,"author":{"id":"3573788625955643","authorId":"3573788625955643","name":"Alvin1975","avatar":"https://static.tigerbbs.com/beba0668af2d109b87221754e75935b3","vip":1,"crmLevel":5,"crmLevelSwitch":0,"idStr":"3573788625955643","authorIdStr":"3573788625955643"},"htmlText":"Up","listText":"Up","text":"Up","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9093184866","repostId":1124110006,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":217,"commentSize":46,"repostSize":0,"favoriteSize":4,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; 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