Sea Limited Q4 Review: Uncertain But Exciting Times Ahead
Sea announced Q4 2023 earnings with revenue up just 5% year-over-year. But under the surface much more strength could be seen. Garena's revenue declined by 46%, but bookings show signs of stabilization and management guided for double-digit growth for Free Fire. Shopee's revenue grew by 23% YoY, with investments in sales and marketing paying off in market share gains. While many investors feared TikTok, the numbers show that Shopee beats TikTok on its own turf.
Sea Limited's Q4 2023 earnings report showed strong revenue growth in Shopee and SeaMoney, with signs of stabilization within Garena [with Free Fire emerging as 2023's most downloaded mobile game]. Despite its e-commerce-focused investment cycle causing a decline in gross profit and EBITDA, Sea's management is confident about fending off competition and provided solid growth and profit guidance for 2024. SE stock is undervalued and offers a 5-year CAGR return of 21.89%, making it a solid buy at current levels.
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