Key Takeaways
- Howard Marks’ Oaktree took a new position in Sea in the quarter ended June 30. The stock is down 23% since then, the worst of the five stocks Oaktree bought or added to.
- Barrick Mining and Oaktree Specialty Lending are up since June 30, while Telephone and Data Systems and Viasat are down.
- Sea’s third-quarter revenue rose 43.4% to $8.6 billion, but its earnings per share missed estimates.
- At about 18x forward earnings, with analysts expecting earnings to roughly double by 2028, Marks looks early on Sea.
Howard Marks’ Oaktree has to file its next 13F by Nov. 16, and the stock investors will want to check first is Sea (SE).
Oaktree’s 13F for the quarter ended June 30, filed Aug. 14 and still its latest, shows 635,443 Sea shares worth $61 million. That was a new position and 1.1% of its 13F stocks. Sea is down 23% since June 30, the worst of the five stocks Oaktree bought or added to that quarter.
The other four are split. Barrick Mining (B) is up 6% since June 30 and Oaktree Specialty Lending (OCSL) is up 4%. Telephone and Data Systems (TDS) is down 14% and Viasat (VSAT) is down 16%. (Those are the stocks’ moves from their quarter-end prices. A 13F doesn’t show what Oaktree paid, or whether it still owns them.)
Two winners and three losers so far
The biggest of the five bets is TDS: 5.28 million shares worth $196 million at June 30, after a 23% addition to the stake. That’s 3.7% of Oaktree’s 13F stocks and its No. 6 holding. Barrick, the best of the five, got a slightly smaller boost: Oaktree added 22% to its Barrick stake, taking it to 3.21 million shares worth $118 million. Oaktree more than quadrupled its stake in Oaktree Specialty Lending, the listed lender it manages, to 7.87 million shares worth $94 million. Viasat was new, like Sea, at 630,280 shares worth $57 million.
So Marks’ two newest names are his two worst since June 30, and Sea fell hardest.
TIKR tracks 27 analysts on Sea. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Sea, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Sea’s Analyst Ratings
Sea’s revenue jumped 43.4%, and it still missed
Most of Sea’s third-quarter report on Nov. 10 was strong. Sea said in its release that revenue rose 43.4% to $8.6 billion and net income rose 34% to $502.5 million. Shopee’s revenue grew 41.3% to $6.1 billion, and Monee’s loans outstanding rose 60% to $12.6 billion.
But adjusted earnings of $0.78 a share missed Wall Street’s estimates, and the stock slid after the report. Sea also announced another $1 billion buyback, which its board approved on Nov. 9. It had just spent $997.2 million buying back 11.1 million shares under the last one.
Sea looks cheap if the estimates hold
Analysts expect Sea’s normalized earnings per share to grow from $3.17 in fiscal 2025 to $3.67 this year, $4.81 in 2027 and $6.45 in 2028:
That’s roughly double 2025’s figure in three years. And one miss in a quarter when revenue grew 43.4% doesn’t make me expect deep cuts to those numbers.
Yet Sea trades at about 18x forward earnings. That’s a modest price for a company analysts expect to grow earnings by about a third a year in 2027 and 2028.
Wall Street’s targets have come down, but far less than the stock. The consensus target is $142, down from $194 a year ago:
Over the same year, the stock has roughly halved, to $73.99. Even the lowest analyst target, $70, is barely below that.
Marks looks early on Sea
The risk is that the miss becomes a pattern. If Sea’s profits keep trailing its sales, analysts will cut their 2027 and 2028 numbers, and 18x won’t look so cheap.
Here’s where I land: Marks looks early. Sea grew revenue over 40% last quarter, is buying back stock and trades at 18x earnings that analysts expect to roughly double by 2028. That makes it worth owning at $74, and I’d rather be early with Marks here than late.
Of course, Oaktree’s 13F due by Nov. 16 will only show whether it held Sea through Sept. 30, before the report. What would change my answer is analysts cutting their estimates around Sea’s fourth-quarter report early next year.
So what is Sea stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Sea could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
