Earnings Previews: Sea Limited, Shoals Technologies, Take-Two

Premarket trading Friday had all three major U.S. indexes trading in the green. Six of the 11 S&P sectors closed higher on Thursday, led by communications services (up 1.1%). The tech sector, which closed down 1%, was the day’s biggest loser.

After markets closed Thursday, Affirm posted a smaller-than-expected per-share loss and also beat the consensus revenue estimate. User numbers rose sharply, as did transactions. Shares traded about 30% higher in Friday’s premarket.

Toast reported a larger-than-expected per-share loss but a near-90% year-over-year increase in revenue that beat estimates by more than 10% and raised guidance for the second quarter and the full fiscal year more than made up for the loss. The stock traded up about 5% early Friday.

Algonquin Power reported earnings in line with expectations and a 16% year-over-year increase in revenue that beat consensus estimates by around 3.4%. Shares traded 4.5% higher in Friday’s premarket.

Joby Aviation posted a loss per share of $0.11, less than the expected loss of $0.24. The electric aircraft developer also reported cash, equivalents and short-term investments totaling $1.2 billion. The stock traded up about 4% Friday morning.

Here is a look at three companies due to report results Monday afternoon or Tuesday morning.

Sea Limited

Singapore-based Sea Ltd. (NYSE: SE) operates Asia’s leading online gaming and entertainment site. Over the past 12 months, the stock has dropped by 73%. It posted an all-time high last October and has plunged by more than 83% since. The company reports quarterly results before markets open on Tuesday.

The stock got a lift on Thursday following a resumption of coverage by Goldman Sachs with a Buy rating and a price target of $196. The company’s rapid expansion has been costly and only intermittently successful. Recent forays in India have not been overwhelming. On top of that, investor aversion to growth stocks could not have come at a worse time for Sea.

Of 31 analysts covering the stock, 27 have a Buy or Strong Buy rating and three others have a Hold rating. At a recent price of around $61.50 a share, the stock’s implied upside based on a median price target of $175.00 is about 185%. At the high price target of $370.76, the upside potential is 503%.

Analysts expect Sea to report first-quarter revenue of $2.9 billion, which would be down by 10.1% sequentially but almost 65% higher year over year. The expected quarterly loss per share of $1.22 would be worse than the prior quarter’s loss of $0.88 and $0.60 worse than the year-ago loss. For the full fiscal year, the loss per share is forecast at $5.15, worse than the loss per share of $2.96 in 2021, on sales of $13.39 billion, up about 34.5% year over year.

Sea is not expected to post a profit in 2022, 2023 or 2024. The company’s enterprise value-to-sales multiple for the next three years is 2.1 for 2022, 1.6 next year and 1.2 in 2024. The stock’s 52-week trading range is $54.06 to $372.70, and the low was posted Thursday. Sea does not pay a dividend, and total shareholder return for the past year is negative 71.2%.

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