Earnings Calendar (10Nov25)
EARNINGS
We are monitoring the upcoming earnings reports for a portfolio of key companies, including Monday, Occidental, Cisco, Disney and Sea Limited.
Let us look at Sea Limited in detail.
Market Performance and Outlook
-
Year-over-Year Stock Performance: The stock price has experienced a significant increase, rising 60.3% from a year ago.
-
Analyst Consensus and Price Target:
-
The consensus analyst sentiment is a Strong Buy rating.
-
The established price target of $196.56 implies a substantial 31.16% potential upside from the current share price.
-
Technical Analysis: Current technical indicators are recommending a Strong Sell rating, which presents a divergence from fundamental analyst sentiment.
Revenue and Profitability Trends
-
Revenue Growth: Revenue has demonstrated aggressive expansion, growing from $292 million in 2015 to $16.82 billion in 2024. The 10-year Compound Annual Growth Rate (CAGR) for revenue is 59.2%.
-
Gross Profit Growth: Gross profit shows a parallel growth trajectory, increasing from $180 million in 2015 to $7.2 billion in 2024.
-
Operating Profit Transformation: The company has successfully transitioned its operating performance from a $$83 million loss in 2015 to a positive $662 million profit in 2024.
-
Net Profit: The company has reported a net profit for both the 2023 and 2024 fiscal years after years of losses.
Valuation and Efficiency Concerns
-
High Valuation: The current Price-to-Earnings (P/E) ratio stands at a steep 75.8, suggesting a premium valuation.
Asset Growth and Debt:
-
Total assets have grown at a 10-year CAGR of 55.1%.
-
The Debt-to-Assets ratio of 0.2 is not considered overly concerning.
Efficiency Metrics (10-Year Median): There are specific concerns regarding historical efficiency metrics:
-
The 10-year median Free Cash Flow (FCF) margin is -11.3%.
-
The 10-year median Return on Assets (ROA) is -24.9%.
Sea Limited (SE) Earnings and Investment Assessment
The upcoming earnings forecast for Sea Limited is optimistic, projecting Revenue of $5.69 billion and Earnings Per Share (EPS) of $1.02. This suggests expectations for increased revenue and profitability in the forthcoming report, indicating a positive trajectory for the company’s financial performance.
Investment Considerations and Strategy
Valuation and Profitability Concerns
It is prudent to note the existing concerns regarding the company’s valuation. The high Price-to-Earnings (P/E) ratio signifies that the market is assigning a substantial premium to the company’s future growth potential. This valuation premium implies a higher degree of risk, as the stock is priced for aggressive growth. Furthermore, the concern over historical profitability is understandable. While high-growth technology companies often prioritise market share over immediate earnings, the recent transition to positive net income is a crucial and positive development.
I prefer to monitor the business for this season.
Comments