Is Sea Stock a Buy After Promising to Slash Expenses?
Shares of Sea Limited (NYSE: SE), southeast Asia's leading internet company, continue their wild ride. The stock is trading down 75% in 2022 with just over a month left to go. However, following the third-quarter earnings update, shares rallied some 40% before giving back some gains as management promised to slash expenses. After a spate of heavy spending to support unprofitable expansion in 2020 and 2021, the company's new goal is to get operations running self-sufficiently as soon as possible.
Sea's e-commerce business Shoppee is expected to reach breakeven by the end of 2023, but its profitable video game segment Garena (led by the global hit Free Fire) still struggles as many gamers return to work or school. With a long and hard road ahead of it, is now the time to buy Sea stock?
At times in 2020 and 2021, Sea actually started to turn free-cash-flow positive. But as the pandemic boom in online business activity returned to normal in 2022, Sea's free cash flow turned negative -- to the tune of negative $1.68 billion over the last 12-month stretch.
Source Fool.com
