Earnings Previews: Dick's Sporting Goods, Sea Limited

A week ago, Dick’s agreed to acquire online outdoor retailer Moosejaw from Walmart. No purchase price was revealed, but Walmart paid $51 million to acquire Moosejaw six years ago. Like its competitors, Dick’s prospered during the pandemic and is looking to retain some of the growth it had in that period.

Analyst sentiment trends bullish, with 13 of 27 ratings at Buy or Strong Buy. Another 13 analysts rate the stock a Hold. At a recent share price of around $129.50, the upside potential based on a median price target of $138.00 is 6.6%. At the high target of $166.00, the upside potential is 28.2%.

For the company’s fourth quarter of fiscal 2023, analysts expect revenue of $3.44 billion, which would be up 16.4% sequentially and by 2.7% year over year. Adjusted EPS are forecast at $2.89, up 11.1% sequentially but down 20.6% year over year. For the full fiscal year that ended in January, EPS are forecast to come in at $11.97, down 23.8%, on sales of $12.21 billion, down 0.7%.

The stock trades at at 10.8 times expected 2023 EPS, 10.7 times estimated 2024 earnings of $12.07 and 10.2 times estimated 2025 earnings of $12.74 per share. The stock’s 52-week trading range is $63.45 to $138.43. Dick’s pays an annual dividend of $1.95 (yield of 1.52%). Total shareholder return for the past year was 18.67%.

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 46%, including a bump of more than 22% so far in 2023.

Sea Limited exploded during the pandemic, and the company tried to expand its success in Asia into other markets. That did not work out too well, and the company has now refocused its emphasis on its home market. The company has cut its spending and narrowed its losses, leading some analysts and investors to believe that profitability may be in sight. Keep an eye on guidance.

Of 32 analysts covering the stock, 22 have a Buy or Strong Buy rating and eight others rate it at Hold. At a share price of around $64.00, the stock’s implied upside based on a median price target of $82.50 is 28.9%. At the high price target of $159.00, the upside potential is 148.4%.

Analysts expect Sea to report second-quarter revenue of $3.06 billion, down about 3% sequentially and 5% lower year over year. The expected quarterly loss per share is $0.55, better than the prior quarter’s loss of $0.66, and $0.33 better than the year-ago loss. For the full fiscal year, the loss per share is forecast at $3.51, worse than the loss per share of $2.96 in 2021, on sales of $12.01 billion, up about 20.7% year over year.

Sea Limited is not expected to post a profit in 2022 or 2023. The estimated price-to-sales multiple in 2024 is 124.2. The stock’s 52-week range is $40.66 to $136.43. The company does not pay a dividend, and total shareholder return for the past year is negative 46.02%.

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