Price $73.83
Year Range $34.82 - $76.28
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Volume 2,650,000
Market Cap $42.4B
PE Ratio 1230.5
Dividend Yield 0%
Industry Online Retail

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Job Posts View All

Sea Limited - AI Stock Analysis

Analysis generated July 13, 2024

Sea Limited (NYSE: SE) is a Singapore-based consumer internet company known for its leadership in digital entertainment, e-commerce, and digital payments. The company operates under three main brands: Garena, Shopee, and SeaMoney. Garena is a leading global online games developer and publisher, Shopee is a regional e-commerce leader, and SeaMoney provides digital financial services. As a conglomerate that is deeply ingrained in the digital ecosystem of Southeast Asia and Taiwan, Sea Limited has positioned itself as a juggernaut in regions enjoying rapid digital adoption and economic growth.

Fundamental Analysis

Revenue: Sea Limited reported a revenue of $3.64 billion for the last quarter. This figure is stable when compared to the previous quarter's revenue but shows a commendable increase of 19.76% compared to the same quarter last year. This year-over-year growth is a positive sign, reflecting the company's capability to grow its top-line consistently.

Net Income: The net income for the last quarter came in at $111 million, again stable compared to the previous quarter. However, this marks a significant drop of 225.47% from the same quarter the previous year. This decline in profitability could raise red flags for investors looking at the company's bottom line.

EBITDA: EBITDA for the last quarter was $14 million, showing consistency with the previous quarter. Yet, there's a substantial decline of 104.38% from the same quarter last year, pointing to potential operational challenges.

P/E Ratio: The current Price-to-Earnings (P/E) ratio stands at a staggering 1230.5. This high ratio possibly indicates that the stock is overvalued, suggesting a bearish outlook. An inflated P/E ratio usually presages an eventual correction unless backed by robust earnings growth.

Technical Analysis

Stock Price: Today's stock price of Sea Limited is $73.83, marking a decrease of 0.98% compared to a month ago, a concerning short-term indicator. However, compared to a year ago, there has been an 18.13% increase, reflecting a positive long-term trend.

Simple Moving Average (SMA): The current 10-day SMA is 72.99, which is slightly higher than the previous SMA10 of 72.76. This minor uptrend indicates potential upward momentum in the stock's price movements.

Relative Strength Index (RSI): The RSI is currently at 55.3, indicating a neutral market condition. Neither overbought nor oversold, this suggests that the stock may follow the general market trends in the short term.

Alternative Data Analysis

Job Postings and Employee Sentiment: Sea Limited has maintained 16 open positions over the last couple of months. This stability reflects a balanced workforce and a steady hiring environment, often indicative of sustained business operations.

Customer Acquisition: The company’s website has garnered an estimated 440,000 visitors, a substantial 116% increase over the last couple of months. This sharp uptick in web traffic is a bullish signal, as it suggests growing consumer interest and potential sales opportunities.

Customer Engagement: Sea Limited's Twitter page follower count stands at 1,500 and has remained unchanged over the past few months. The absence of growth in followers suggests stagnant social media engagement, which might not resonate well with the company's digital consumer base.

AltIndex AI Score: According to AltIndex, Sea Limited has an AI score of 76, which is a buy signal. This score consolidates fundamental, technical, and alternative data insights, indicating a positive outlook on the stock.

Conclusion and Recommendation

Sea Limited demonstrates solid revenue growth and a positive long-term trend in the stock price. However, the significant decline in net income and EBITDA over the past year, coupled with a very high P/E ratio, raises concerns about valuation and profitability. On the brighter side, increasing web traffic and stable job postings suggest an operationally stable company poised for growth.

Given the mix of positive and negative signals, Sea Limited presents a nuanced case. While there is evidence of operational stability and growing consumer interest, the financial metrics indicate some areas of concern. Investors should carefully weigh these factors. The high AltIndex AI Score of 76 supports a buy recommendation, but it is advisable to tread cautiously and monitor the company's future financial performance closely.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.

The analytics provided are estimates and not a substitute for professional advice. All investments involve risks, including possible capital loss.
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