Shares of Sea Limited are rising after the company reported a third-quarter earnings beat.
- We start with my pick, which is Sea Limited, ticket SE. Now, the Singaporean gaming and retail tech firm jumping over 40% today. That's after handily beating Q3 earnings estimates. Now, the company's Shopee platform that's widely considered a rival to Alibaba saw revenue grow 32.4% year over year to $1.98 billion.
Now Sea Limited did lower its outlook, though, for bookings for the full year of 2022 to between $2.6 billion and $2.8 billion, versus the $2.9 billion to $3.1 billion in its previous guidance. So to improve profitability, we know that the company has also laid off about 7,000 workers-- that's about 10% of its workforce-- since June.
Now, we're also seeing the co-founder, Forrest Lee, following suit in an internal memo from September that said the top management would also forgo their salaries to curb spending. You have rising interest rates, of course, and strong competition, just part of the reason that the stock is off about 70% year to date. But JP Morgan's Ranjan Sharma upgraded Sea to overweight from neutral, so seems to be bullish on that path to profitability ahead, Seana.
- Yeah, it sounds like at least, I guess, the company is better positioning themselves than where they have been over the last several months. You mentioned the fact that the stock's down about 70% year to date. Maybe Wall Street is getting a little bit more bullish, given the current valuation.
Although that 40% jump today, I mean, that's massive. And if you dig into the results, there's still a number of challenges and headwinds that are in front of this company. So you would think as consumers might pull back, as these macroeconomic challenges continue here on a global scale, this could potentially hurt Sea Limited in the short term.