Why Sea Limited was a wreck on Monday

What happened

Southeast Asia stocks e-all tech warehouse Sea Limited (NYSE: SE) closed 10.3% on Monday. It’s a shame because the only real news about Sea Stock today was the “good news” sort.

so what

This morning analysts at the Australian investment bank Macquarie upgraded the shares of Sea Limited to “Outperform” (ie buy), Reports TheFly.comand their price target for the e-commerce star more than doubled. At $ 280 per share, Macquarie’s target means up to 35% more than Sea’s closing price for the day.

Macquarie cited Sea’s “strong financial outlook” in which the company forecast it will more than double its e-commerce business this year compared to 2020 and increase its digital entertainment revenue by 38%. These two companies combined accounted for more than 95% of Sea’s total sales of $ 4.4 billion, according to data last year S&P Global Market Intelligence. Overall, this amount could double again to USD 9 billion in 2021.

Image source: Getty Images.

What now

Even in the worst case scenario, where Sea’s fintech business doesn’t grow at all, there is an excellent chance that Sea will more than double its total revenue in 2021. So why was the sea population declining today?

Perhaps for the same reason it has fallen more than 25% in the past few weeks: Macquarie attributes the sell-off to investors who fear rising bond yields for “safe” bond investments will attract investors, fear of the Sea skies have valuation of 24 times trailing sales and missing profit.

With Sea’s generally accepted accounting principles (GAAP), profitability is at least two years away (analysts say), but bond rates are rising today, that can be a cause for concern.

We like 10 stocks better than Sea Limited
When investing geniuses David and Tom Gardner have a stock market tip, it can be worth listening. After all, the newsletter they’ve been running for over a decade is Motley Fool stock advisorhas tripled the market. *

David and Tom have just revealed what they think they are ten best stocks for investors to buy now … and Sea Limited was not one of them! That’s right – they think these 10 stocks are even better buys.

See the 10 stocks

* The Equity Advisor returns on February 24, 2021

Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Sea Limited. The motley fool has one Confidentiality Policy.

The views and opinions expressed are those of the author and do not necessarily reflect those of Nasdaq, Inc.

About Susan Dailey


Check Also

A changing tide in the bankruptcy exemption of certain student loan debts

On August 31, the US 10th District Court of Appeals issued its opinion In right …

Leave a Reply

Your email address will not be published. Required fields are marked *