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Nov 07, 2019

Sea Limited hitting upper rail of downward sloped channel with earnings looming

Sea Limited (NYSE: SE) is an electronic gaming and multimedia company based in Singapore. The company is set to announce earnings results on November 12 with analysts expecting the company to report losses of $0.53 per share. The expected is lower than the $0.70 the company lost in the third quarter of last year.

Because the company has lost money to this point, the return on equity, profit margin, and operating margin are all negative. With the negative readings in these key indicators, the Tickeron SMR rating for Sea Ltd. is 100, the worst rating a company can get. The reading indicates weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents.

The Tickeron Profit vs. Risk Rating is 100, and that is also the worst rating a company can get in this category. It indicates that the returns do not compensate for the risks. Sea's unstable profits reported over time resulted in significant drawdowns within these last five years. A stable profit reduces stock drawdown and volatility.

The Tickeron Valuation Rating for Sea is 64 and that indicates that the company is fair valued in the industry. A rating of 1 points to the most undervalued stocks, while a rating of 100 points to the most overvalued stocks. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization.

In addition to the negative fundamentals, the technical picture isn't looking very good for Sea either. The stock has been trending lower since early August with a trend channel forming that defines the various cycles within the overall trend. The stock hit the upper rail of the channel on November 4 and turned lower the next day.

We also see that the stock is overbought based on the daily stochastic readings and the indicators made a bearish crossover on November 5. The 10-day RSI flirted with overbought territory, but turned lower on the downward move. The stock moved above its upper Bollinger Band on November 4 which is yet another indication that the stock is overbought and could turn lower.

Sea Limited doesn't have a great deal of analysts covering it, but all 11 analysts that are covering it rate the stock as a "buy". There is room for additional coverage on the stock, but there isn't any room for upgrades from the current coverage.

The one area that could help Sea is the short interest ratio. The ratio is at 6.5 currently and that indicates some bearish sentiment directed at the stock. If the company can issue an earnings surprise, the short sellers could add fuel to the rally as they scramble to cover their positions.

Looking back at previous earnings reports, I found two statistics that are concerning for Sea Ltd. Investors. First, the company has missed its EPS estimate in five of the last six quarters. The only time it beat during this stretch was back in May when the company only lost $0.64 per share when it was expected to lose $0.65.

The second concern was from stocksearnings.com and it showed that the stock has moved down after earnings' reports in 22 out of the last 35 quarters.

Given the fundamentals, the technical picture, the sentiment, and the earnings' history, I don't have much optimism for Sea Limited after reporting.

Related Ticker: SE

SE sees its 50-day moving average cross bullishly above its 200-day moving average

The 50-day moving average for SE moved above the 200-day moving average on March 22, 2024. This could be a long-term bullish signal for the stock as the stock shifts to an upward trend.

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 58 cases where SE's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where SE advanced for three days, in of 330 cases, the price rose further within the following month. The odds of a continued upward trend are .

Bearish Trend Analysis

The 10-day RSI Indicator for SE moved out of overbought territory on March 15, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 47 similar instances where the indicator moved out of overbought territory. In of the 47 cases, the stock moved lower in the following days. This puts the odds of a move lower at .

The Momentum Indicator moved below the 0 level on April 19, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on SE as a result. In of 76 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .

The Moving Average Convergence Divergence Histogram (MACD) for SE turned negative on March 19, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 49 similar instances when the indicator turned negative. In of the 49 cases the stock turned lower in the days that followed. This puts the odds of success at .

Following a 3-day decline, the stock is projected to fall further. Considering past instances where SE declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

SE broke above its upper Bollinger Band on April 09, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

The Aroon Indicator for SE entered a downward trend on April 19, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.

Fundamental Analysis (Ratings)

Fear & Greed

The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. SE’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. SE’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 92, placing this stock better than average.

The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (4.748) is normal, around the industry mean (3.686). SE's P/E Ratio (220.240) is considerably higher than the industry average of (58.820). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (1.849). Dividend Yield (0.000) settles around the average of (0.026) among similar stocks. P/S Ratio (2.505) is also within normal values, averaging (10.292).

Notable companies

The most notable companies in this group are Amazon.com (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA), PDD Holdings (NASDAQ:PDD), JD.com (NASDAQ:JD), eBay (NASDAQ:EBAY), Vipshop Holdings Limited (NYSE:VIPS), Chewy (NYSE:CHWY), Wayfair (NYSE:W), Just Eat Takeaway.com NV (OTC:JTKWY), Revolve Group (NYSE:RVLV).

Industry description

The internet retail industry includes companies that sell products and services through the Internet. With more and more consumers using online retailers, the companies have seen a big increase in the use of their services. Some of the companies in the group are focused on selling business-to-business products and services. Others sell business-to-consumer products and services. Internet retailers offer a wide variety of products like books, apparel, and electronics. Some companies even specialize in only one or two categories. One potentially critical factor for players to thrive in this space is the quality and speed of product delivery. This requires an investment in efficient distribution networks. Things like logistics are important factors in the success in the extremely competitive industry. For a company to stay relevant in the industry it must have effective pricing strategies and upgraded websites. The websites must be easy to navigate and engaging for customers. In addition to the revenues generated from straight sales, internet retailers can generate revenue from subscription fees and advertising. Amazon.com, Inc., Alibaba Group, and JD.com are some of the global leaders.

Market Cap

The average market capitalization across the Internet Retail Industry is 30.01B. The market cap for tickers in the group ranges from 30 to 1.82T. AMZN holds the highest valuation in this group at 1.82T. The lowest valued company is YUKA at 30.

High and low price notable news

The average weekly price growth across all stocks in the Internet Retail Industry was -5%. For the same Industry, the average monthly price growth was -5%, and the average quarterly price growth was 34%. WISH experienced the highest price growth at 17%, while PLTXF experienced the biggest fall at -32%.

Volume

The average weekly volume growth across all stocks in the Internet Retail Industry was -19%. For the same stocks of the Industry, the average monthly volume growth was -14% and the average quarterly volume growth was -3%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 59
P/E Growth Rating: 71
Price Growth Rating: 62
SMR Rating: 84
Profit Risk Rating: 91
Seasonality Score: -3 (-100 ... +100)
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General Information

a provider of online gaming services

Industry InternetRetail

Profile
Fundamentals
Details
Industry
Internet Software Or Services
Address
1 Fusionopolis Place
Phone
+65 62708100
Employees
63800
Web
https://www.sea.com
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