Sea Limited
Singapore-based Sea Limited (NYSE: SE) operates Asia’s leading online gaming and entertainment platform. Over the past 12 months, the stock has dropped by about 71%. The stock posted an all-time high last October and has plunged by around 83% since. Consumer spending on the company’s Garena platform declined by 6.6% in the first half of this year. Bookings were down in the first quarter and profitably remains a distant objective. The second quarter could be a buying opportunity or a value trap.
Of 30 analysts covering the stock, 26 have a Buy or Strong Buy rating and 3 others have a rating of Hold. At a share price of around $87.00, the stock’s implied upside based on a median price target of $120.00 is nearly 75%. At the high price target of $180.00, the upside potential is 107%.
Analysts expect Sea to report second-quarter revenue of $3.03 billion, 4.5% higher sequentially and up almost 33% year over year. The expected quarterly loss per share of $1.06, worse than the prior quarter’s loss of $0.80 and $0.45 worse than the year-ago loss. For the full fiscal year, the loss per share is forecast at $3.98, worse than the loss per share of $2.96 in 2021, on sales of $13.13 billion, up about 31.9% year over year.
Sea is not expected to post a profit in 2022, 2023 or 2024. The enterprise value to sales multiple is estimated at 3.4 times sales for 2022, 2.7 times estimated 2023 sales of $16.93 billion and 2.1 times estimated 2024 sales of $21.06 billion. The stock’s 52-week range is $54.06 to $372.70. Sea does not pay a dividend, and the total shareholder return for the past year is negative 71.5%.
Walmart
The second Dow component reporting early Tuesday morning is Walmart Inc. (NYSE: WMT). Over the past 12 months, the company has seen its share price decrease by nearly 11.5%. Inflation, especially high fuel prices, has encouraged consumers to shop at discount markets closer to where they live and, Reuters reported Thursday, “there are no signs shoppers are returning to the nation’s biggest retailer.” July data indicated that foot traffic in Walmart’s U.S. stores declined by 2.7%.
Analysts remain bullish on the stock, however, with 27 of 39 awarding the shares a Buy or Strong Buy rating and the rest rating the stock at Hold. At a share price of around $130.20, the upside potential at the median price target of $141.00 is about 7.5%. At the high target of $170.00, the implied upside is 30.6%.
For its second quarter of fiscal 2023, Walmart is expected to report sales of $149.78 billion, up 6.8% sequentially and down about 7.1% year over year. Adjusted EPS are pegged at $1.60, up 23.1% sequentially and down 10.1% year over year. For the full fiscal year ending in January, analysts forecast EPS of $5.75, down 11%, on sales of $593.60 billion, up about 4.6%.
Walmart stock trades at 22.6 times expected 2023 EPS, 20.0 times estimated 2024 earnings of $6.51 and 18.4 times estimated 2025 earnings of $7.10 per share. The stock’s 52-week range is $117.27 to $160.77. Walmart pays an annual dividend of $2.24 (yield of 1.47%). Total shareholder return for the past year was negative 11.1%.
Originally posted at 24/7 Wall St.
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