Sea Limited SE is set to release second-quarter 2020 results on Aug 18.
The Zacks Consensus Estimate for loss has been unchanged at 57 cents per share over the past 30 days. Sea Limited reported a loss of 37 cents per share in the year-ago quarter.
Moreover, the consensus mark for revenues is currently pegged at $1.03 billion, indicating 55.5% growth from the year-ago quarter’s reported figure.
The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, missing the same in one, the average beat being 5.42%.
Let’s see how things shaped up prior to this announcement.
Factors at Play for Q2 Results
Sea Limited’s digital entertainment (Garena) and e-commerce businesses are expected to have capitalized on the coronavirus outbreak in the second quarter.
Garena is likely to have benefited from the continued popularity of Free Fire. Per Sensor Tower data, the game was the third most-downloaded mobile game in June, globally. According to App Annie data cited by VentureBeat, Free Fire dominated the action category in second-quarter 2020.
The game’s immense fame can be attributed to coronavirus-led school closures amid lockdowns and social distancing.
Moreover, the company’s e-commerce segment is likely to have gained from a strong uptick in Shopee, its online shopping platform.
Gross orders totaled 429.8 million, up 111.2% year over year in the first quarter of 2020, a trend that most likely continued in the to-be-reported quarter.
Moreover, SeaMoney’s strengthening integration with Shopee is expected to have aided Sea’s digital financial services business.
However, higher expenses related to expansion of e-commerce services and continued efforts to integrate the company’s mobile wallet services with Shopee platform across different markets is expected to have negatively impacted profitability in the to-be-reported quarter.
What Our Model Indicates
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Sea Limited has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies worth considering from the same sector as our model shows that these have the right combination of elements to beat on earnings this reporting cycle:
Agilent Technologies A has an Earnings ESP of +5.00% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Autodesk ADSK has an Earnings ESP of +4.44% and is #3 Ranked.
Bill.com BILL has an Earnings ESP of +10.45% and a Zacks Rank #3.
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Autodesk, Inc. (ADSK): Free Stock Analysis Report
Sea Limited Sponsored ADR (SE): Free Stock Analysis Report
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