Wall Street Analysts Think Sea Limited (SE) Is a Good Investment: Is It?

Core Viewpoint - The average brokerage recommendation (ABR) for Sea Limited is 1.52, indicating a consensus leaning towards a "Buy" rating, but caution is advised as brokerage recommendations may not reliably predict stock performance [2][5][10]. Brokerage Recommendations - Sea Limited has an ABR of 1.52, which is between "Strong Buy" and "Buy," based on recommendations from 22 brokerage firms [2]. - Out of the 22 recommendations, 15 are classified as "Strong Buy" (68.2%) and 2 as "Buy" (9.1%) [2]. Limitations of Brokerage Recommendations - Brokerage recommendations often exhibit a positive bias due to the vested interests of the firms, leading to a higher number of "Strong Buy" ratings compared to "Strong Sell" [6][10]. - The ABR may not be up-to-date, and brokerage analysts tend to be overly optimistic, which can mislead investors [10][12]. Zacks Rank Comparison - Zacks Rank is a proprietary tool that categorizes stocks based on earnings estimate revisions, showing a strong correlation with near-term stock price movements [8][11]. - The Zacks Rank for Sea Limited is currently 4 (Sell), indicating a negative outlook based on recent earnings estimate revisions, which have declined by 3.8% to $4.07 [13][14]. Investment Implications - Given the declining earnings estimates and the Zacks Rank of 4, it is advisable to approach the "Buy" recommendation from the ABR with caution [14].