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Why I Am Even More Bullish on Sea Limited After Its Earnings Report

By Jose Najarro – Aug 19, 2021 at 10:00AM

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Sea Limited's stock price has been trending upward since it reported earnings.

In today's video I look at Sea Limited's (SE 0.38%) most recent earnings and share my thoughts on some bullish and bearish views on its earnings report. Here are some highlights from the video:

  1. Sea Limited reported its second-quarter 2021 earnings before the market opened on Aug. 17. The company reported 159% year-over-year (YOY) revenue growth driven by 65% YOY digital entertainment bookings growth and 161% YOY e-commerce revenue growth. 
  2. Investors should note that expenses have increased dramatically compared to a year ago. Cost of revenue is up roughly 100% YOY, and sales and marketing expenses are up over 130% YOY. Sea Limited is currently in growth mode and is focusing on grabbing as much market share as possible. Regardless, investors need to make sure expenses don't get out of control. 
  3. The digital entertainment segment, which is driven by gaming products, continues to show substantial numbers worldwide. For the past eight quarters, Free Fire, Sea Limited's most popular game, has been the highest-grossing mobile game in Southeast Asia and Latin America. The game has also shown impressive numbers in India and the United States.

Click the video below for my full thoughts and analysis. 

*Stock prices used were the premarket prices of Aug. 17, 2021. The video was published on Aug. 17, 2021.

Jose Najarro owns shares of Sea Limited. The Motley Fool owns shares of and recommends Sea Limited. The Motley Fool has a disclosure policy. Jose is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Stocks Mentioned

Sea Stock Quote
$61.38 (0.38%) $0.23

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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