Khac Phu Nguyen
1 min read
This article first appeared on GuruFocus.
Sea Limited (NYSE:SE) shares jumped 6.83% to $83.29 as of 9:53 a.m. ET in regular trading on November 10, after the Singapore-based e-commerce, fintech and gaming group reported third-quarter revenue of $8.6 billion, up 43.4%. The board also approved another $1.0 billion buyback with no expiration date. Before the open the shares had dropped 8.89%.
Adjusted EPS of $0.78 missed the $0.99 consensus, while revenue beat an $8.1 billion estimate. Shopee gross merchandise volume rose 23.3% to $39.7 billion. Monee revenue climbed 63.9% to $1.6 billion on a loan book up 60.0% to $12.6 billion. Garena bookings grew 5.9% to $890.0 million. Total adjusted EBITDA rose 28.9% to $931.3 million. Under the prior program, Sea had already bought back 11.1 million shares for $997.2 million.
EBITDA grew slower than sales. By my math, adjusted EBITDA margin slipped to 10.8% from 12.0% a year earlier. The new buyback equals about 2% of Sea’s roughly $50 billion market value. GuruFocus scores Sea at 78/100, with Financial Strength 8/10, Momentum 5/10, Profitability 4/10 and GF Value Rank 4/10. The shares trade 46.11% below the $154.55 GF Value, “Significantly Undervalued,” but the weak profitability rank tempers that. The fourth-quarter margin trend is the next test.
