Shares of consumer internet company Sea Ltd. (NYSE:SE) are down in the double digits today after its second-quarter sales at $3.1 billion missed expectations by $150 million. EPS at $0.54, on the other hand, outperformed estimates by $0.08.
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During the quarter, eCommerce revenue surged 20.6% year-over-year to $2.1 billion on the back of robust gains in its core marketplace revenue and value-added services revenue. Revenue from the digital entertainment vertical though, dropped to $529.4 million from $539.7 million in the year-ago period as both bookings and average bookings per user turned lower.
Meanwhile, revenue from the digital financial services vertical popped by an impressive 53.4% to $427.9 million as compared to the year-ago period.
Importantly, Sea’s provision for credit losses rose by 37.1% over the prior year to $153 million during the quarter even as it focuses on ramping up investments in its eCommerce business across its markets over the coming periods.
Overall, the Street has a $98.81 consensus price target on Sea alongside a Strong Buy consensus rating. This implies a 73.7% potential upside in the stock.
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