What happened
Earnings seasons both giveth and taketh away. In the case of ambitious Singapore-based tech company Sea Limited (SE -0.69%) this period, it was very much the latter.
The company's latest earnings report on Tuesday revealed a much deeper-than-expected loss. As a result, both investors and analysts cooled notably on the stock. Week to date as of Thursday's market close, Sea Limited's shares were down by nearly 20%, according to data compiled by S&P Global Market Intelligence.
So what
Sea reported fourth-quarter 2021 revenue that more than doubled on a year-over-year basis (to $3.2 billion) and eclipsed the average analyst estimate. That was the good news. The not-so-good news is that the company missed badly on the bottom line, reporting a non-GAAP (adjusted) net loss of almost $485 million. That is an awful lot of red ink.
Image source: Getty Images.
In the wake of the earnings report, numerous analysts scrambled to reduce expectations for the stock. Among the clutch of prognosticators lowering their price targets was Morgan Stanley's Mark Goodridge, who cut his slightly from $225 per share to $220. He's concerned that Sea's Garena gaming unit is being buffeted by "multiple headwinds."
However, he's optimistic about both the company's e-commerce business, Shopee, and its SeaMoney payment ecosystem. Buoyed by this, Goodridge is maintaining his overweight (read: buy) recommendation on Sea stock.
Now what
For the most part, the analysts making adjustments to their views on Sea reduced their price targets only, not their recommendations. One slight exception was CFRA, which dropped its recommendation one peg to buy, on concerns about Shopee's lack of profitability. Previously CFRA tagged the shares with a strong buy.
