Mercari (MCARY) AI Stock Analysis

• Market Cap: $3.72B
• Dividend Yield: N/A
• Average Volume (3M): 14.00
• Price to Earnings (P/E): 18.7
• Beta (1Y): 0.52
• Revenue Growth: 5.63%
• EPS Growth: 111.35%
• Country: US
• Employees: 2,080
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 0.11
• Shares Outstanding: 329,940,220
• 10 Day Avg. Volume: 44
• 30 Day Avg. Volume: 14
• PEG Ratio: 0.18
• Price to Book (P/B): 4.44
• Price to Sales (P/S): 2.29
• P/FCF Ratio: -35.96
• Enterprise Value/Market Cap: 179.11
• Enterprise Value/Revenue: 3.22
• Enterprise Value/Gross Profit: 4.41
• Enterprise Value/Ebitda: 17.04
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: $12.00 ▲(26.72% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is held back primarily by weak cash generation (negative operating and free cash flow) and higher leverage despite strong profitability. Offsetting that risk, technicals are clearly bullish with price above major moving averages and positive momentum indicators. Valuation appears moderate based on the P/E.

Positive Factors

High margins & ROE

Sustained high gross and operating margins plus a ~29% ROE indicate strong unit economics and pricing power in Mercari's core marketplace. Durable margins provide internal capacity to fund product development and marketing even if top-line growth slows, supporting long-term profitability.

Marketplace + fintech ecosystem

An integrated marketplace with an embedded payments offering creates network effects and multiple monetization levers (transaction fees, payment services, logistics). This structural ecosystem increases customer stickiness and lifetime value, supporting durable revenue diversification and competitive advantage.

Positive revenue trend

Ongoing positive top-line growth, even if moderated, signals continued user engagement and GMV expansion on the platform. Steady revenue provides a base to scale value-added services and improve long-term monetization if cash conversion and reinvestment are better aligned.

Negative Factors

Negative operating & free cash flow

Persistent negative OCF and FCF materially reduce financial flexibility and force reliance on external funding to sustain operations and investments. Over multiple periods this cash burn raises refinancing and capital-allocation risk, limiting the company's ability to self-fund growth or weather downturns.

Elevated leverage

High leverage relative to a specialty retail/marketplace model increases interest and refinancing risk and reduces strategic optionality. If macro or demand conditions deteriorate, servicing debt could constrain investment in product improvements or marketing, pressuring long-term competitiveness.

Decelerating revenue growth

A materially slower growth trajectory reduces the ability to leverage fixed costs and slows expansion of marketplace liquidity. Combined with cash burn and leverage, deceleration makes sustaining market share and funding new initiatives harder without improved cash conversion or external capital.

Mercari Business Overview & Revenue Model

Company Description

Mercari, Inc. engages in the planning, development, and operation of the Mercari marketplace applications in Japan and the United States. Mercari, Inc. was incorporated in 2013 and is based in Tokyo, Japan.

How the Company Makes Money

Mercari generates revenue primarily through transaction fees charged on sales made through its platform. When a seller lists an item and completes a sale, Mercari typically takes a percentage of the transaction as a commission, which serves as the main revenue stream. Additionally, the company offers optional services such as promoted listings and shipping solutions, which provide sellers with enhanced visibility and convenience for a fee. Mercari has also formed strategic partnerships with logistics providers to optimize shipping processes, further enhancing user experience and potentially increasing sales volume. Overall, the company leverages its expansive user base and diverse listings to drive consistent revenue growth.

Mercari Financial Statement Overview

Summary

Strong reported profitability (TTM net margin ~14.3%, EBIT margin ~18.1%) and high ROE (~29%) are positives, but they are outweighed by persistently negative operating and free cash flow (TTM OCF ~-21.1B; FCF ~-22.1B) and elevated leverage (debt-to-equity ~2.17). Slowing revenue growth (~4.3% TTM) also reduces the outlook.

Income Statement

Profitability has improved meaningfully versus earlier years: TTM (Trailing-Twelve-Months) net margin is solid (~14.3%) with strong gross margin (~73%) and healthy operating profitability (EBIT margin ~18.1%). Revenue is still growing (TTM growth ~4.3%), but the growth trajectory has decelerated materially from prior high-growth years, which limits the score despite the clear margin expansion and strong earnings profile.

Balance Sheet

Returns on equity are strong (TTM ROE ~29%), indicating good earnings power on the equity base. However, leverage is elevated: debt-to-equity is ~2.17 TTM, and while improved from the peak (above ~3x in 2022–2023), it remains high for a specialty retail model and increases financial risk if profitability or demand softens.

Cash Flow

Cash generation is the key weakness. Operating cash flow is negative across multiple periods, including TTM (Trailing-Twelve-Months) operating cash flow of about -21.1B and negative free cash flow of about -22.1B, with a sharp deterioration in TTM free cash flow growth. This persistent cash burn reduces financial flexibility and raises reliance on external funding despite strong reported profitability.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	206.61B	192.63B	187.41B	172.06B	147.05B	106.11B
Gross Profit	150.85B	138.26B	129.73B	114.42B	95.14B	81.80B
EBITDA	39.09B	29.67B	20.42B	17.96B	-3.05B	6.03B
Net Income	29.50B	26.11B	13.46B	13.07B	-7.57B	5.72B
Balance Sheet
Total Assets	615.14B	543.76B	501.77B	415.29B	339.86B	262.53B
Cash, Cash Equivalents and Short-Term Investments	159.16B	153.40B	197.31B	204.73B	218.85B	171.46B
Total Debt	234.16B	199.38B	193.31B	157.53B	131.35B	71.15B
Total Liabilities	503.91B	444.12B	429.63B	360.06B	301.87B	222.52B
Stockholders Equity	110.89B	99.27B	71.84B	54.67B	37.68B	39.63B
Cash Flow
Free Cash Flow	-22.05B	-12.25B	-43.49B	-37.35B	-26.89B	2.95B
Operating Cash Flow	-21.14B	-11.95B	-43.34B	-36.88B	-26.22B	3.37B
Investing Cash Flow	-53.30B	-209.62M	-877.00M	-632.00M	-671.00M	6.91B
Financing Cash Flow	50.11B	3.37M	32.09B	26.84B	62.06B	19.77B

Mercari Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 9.47
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MCARY, the sentiment is Positive. The current price of 9.47 is below the 20-day moving average (MA) of 11.07, below the 50-day MA of 10.46, and above the 200-day MA of 8.73, indicating a bullish trend. The MACD of 0.33 indicates Negative momentum. The RSI at 60.94 is Neutral, neither overbought nor oversold. The STOCH value of 68.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MCARY.

Mercari Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MNSO	72 Outperform	$5.51B	18.59	20.83%	3.10%	13.37%	-19.37%
MCARY	64 Neutral	$3.72B	18.66	31.21%	―	5.63%	111.35%
EBAY	63 Neutral	$39.77B	20.94	40.85%	1.38%	4.89%	17.30%
CHWY	63 Neutral	$11.23B	55.90	59.58%	―	9.80%	-46.84%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
ETSY	55 Neutral	$5.19B	39.77	―	―	1.98%	-20.98%
TDUP	54 Neutral	$626.96M	-16.09	-35.37%	―	-4.90%	50.77%