What Happened?
Shares of e-commerce and gaming company Sea (NYSE: SE) jumped 8.8% in the afternoon session after the company reported impressive first quarter 2025 results that blew past analysts' EBITDA expectations. In addition, its number of paying users outperformed Wall Street's estimates by a wide margin. It was also comforting that full-year guidance was maintained. On the other hand, its revenue slightly missed. Overall, we think this was a solid quarter with some key areas of upside.
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What The Market Is Telling Us
Sea’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 16.2% on the news that the company reported strong third-quarter 2024 earnings that blew past analysts' revenue and EBITDA expectations. The EBITDA beat was partly due to its lower sales and marketing expenses compared to the same quarter last year. This sent shares higher because a key debate surrounding Sea was whether the company could hop off the treadmill of marketing spend, which used to exceed its revenue in previous years. Overall, this quarter had some key positives.
Sea is up 47.3% since the beginning of the year, and at $154.47 per share, has set a new 52-week high. Investors who bought $1,000 worth of Sea’s shares 5 years ago would now be looking at an investment worth $2,493.
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