Sea Limited (SE) will release its first quarter earnings report: what lies ahead?

Sea limited liability company SE is scheduled to report first-quarter 2024 results on May 14.

The Zacks Consensus Earnings Estimate remains unchanged at 36 cents over the past 30 days. This number decreased by 40.98% year over year.

The consensus revenue estimate is currently at $3.62 billion, up 22.02% from the year-ago quarter.

SE’s earnings have surpassed the Zacks Consensus Estimate in one of the trailing four quarters and missed the mark in the other three, with the negative earnings surprise averaging 55.87%.

ADR Sponsored Price by Sea Limited and EPS Surprise

ADR Sponsored Price by Sea Limited and EPS SurpriseADR Sponsored Price by Sea Limited and EPS Surprise

ADR Sponsored Price by Sea Limited and EPS Surprise

Sea Limited Sponsored Price ADR-eps-surprise | ADR offer sponsored by Sea Limited

Let’s see what the situation was before this announcement.

Factors influencing first quarter results

Sea Limited’s digital financial services segment is likely to see growth as it diversifies its overall service offering, reaching a wider user base. The Zacks Consensus Estimate is for digital financial services revenues of $487 million in Q1 2024, up 17.91% year-over-year.

Sea Limited’s premier digital financial services offering, SeaMoney, is expected to be a key growth driver of segment performance in the reporting quarter. Continued investment in user acquisition for the lending industry, along with expansion into digital banking and insurance services, is expected to drive SeaMoney’s profitability in the first quarter.

Sea Limited’s digital entertainment business is expected to benefit from increased user engagement and improved gameplay during the reporting quarter.

The launch of significant games such as Garena’s upcoming flagship game, Free Fire, and advancements in artificial intelligence are expected to enhance the operational capabilities of the Garena platform.

In the fourth quarter of 2023, Free Fire reached a peak of over 100 million daily active users and is expected to continue to grow in terms of user base and bookings during the reporting quarter.

The growing momentum of its e-commerce business, thanks to synergies with Shopee to improve service quality for buyers, increase price competitiveness and strengthen its content ecosystem, is expected to contribute to the growth in gross merchandise volume (GMV). This, in turn, probably contributed to the increase in the company’s revenues in the quarter in question.

However, the difficult macroeconomic environment, inflation and rising interest rates are expected to negatively impact SE’s performance in the quarter covered by the report.

What our model indicates

According to the Zacks Model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.

Sea Limited has an Earnings ESP of 0.00% and a Zacks Rank of 2. With our Earnings ESP filter, you can discover the best stocks to buy or sell before they are reported.

Stocks to consider

Here are some companies worth considering because our model shows they have the right combination of elements to beat earnings in upcoming launches:

NVIDIA NVDA has an Earnings ESP of +2.50% and a Zacks Rank of #2. You can see complete list of today’s Zacks #1 ranked stocks here.

NVIDIA shares are up 79.2% year to date. NVDA is scheduled to report first-quarter fiscal 2025 results on May 22.

Agile technologies A has an Earnings ESP of +0.72% and a Zacks Rank of 3.

Agilent Technologies shares are up 4.4% year to date. The A is scheduled to announce its second-quarter fiscal 2024 results on May 29.

Materials used AMAT currently has an Earnings ESP of +0.31% and a Zacks Rank of #3.

Applied Materials shares are up 27.3% year to date. AMAT is scheduled to report fiscal second-quarter 2024 results on May 16.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today you can download the top 7 stocks for the next 30 days. Click to get this free report

NVIDIA Corporation (NVDA): Free Stock Analysis Report

Agilent Technologies, Inc. (A): Free stock analysis report

Sponsored ADR (SE) by Sea Limited: Free Stock Analysis Report

Applied Materials, Inc. (AMAT): Free Inventory Analysis Report

To read this article on click here.

Zacks Investment Research