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Mercadolibre (MELI)
NASDAQ:MELI
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Mercadolibre
(NASDAQ:MELI)76Outperform
Positive Factors
Earnings
A strong fourth-quarter result for MercadoLibre has prompted analysts to increase estimates for margins and earnings.
Growth Potential
MercadoLibre is well-positioned in the Latin American e-commerce and fintech sectors, benefiting from underpenetrated markets and growth potential in advertising and consumer banking.
Market Position
Mercadolibre has a dominant market share of over 50% in Argentina's eCommerce market, positioning it strongly against limited local competition.
Negative Factors
Foreign Exchange and Interest Rates
MELI's share price has pulled back -17% from late-November highs, largely attributed to recent FX and interest rate headwinds in Brazil.
Valuation Concerns
The current valuation of MercadoLibre is considered rich, with a 49x P/E ratio, which reflects its current value, leading to a neutral rating.
Mercadolibre (MELI) vs. S&P 500 (SPY)
Market Cap
$104.43B
Dividend YieldN/A
Average Volume (3M)399.32K
Price to Earnings (P/E)54.6
Beta (1Y)1.11
Revenue Growth43.56%
EPS Growth91.72%
CountryUS
Employees58,313
SectorConsumer Cyclical
Sector Strength53
IndustryRetail - Discretionary
Share Statistics
EPS (TTM)37.69
Shares Outstanding50,697,376
10 Day Avg. Volume548,312
30 Day Avg. Volume399,317
Financial Highlights & Ratios
PEG Ratio0.60
Price to Book (P/B)N/A
Price to Sales (P/S)5.05
Price to Cash Flow (P/CF)9.00
P/FCF Ratio10.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$2,593.08Price Target Upside25.89% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
Mercadolibre Business Overview & Revenue Model
Company DescriptionFounded in 1999, Argentina-based MercadoLibre, Inc. provides the largest online commerce and payments ecosystem in Latin America. The company provides users a mechanism for buying, selling and paying as well as collecting, generating leads, and comparing lists through e-commerce transactions. It has operations in 18 countries including, Argentina, Brazil, Mexico, Colombia, Chile, Venezuela and Peru.
How the Company Makes MoneyMercadoLibre generates revenue through multiple streams, primarily from its e-commerce platform. The company earns from transaction fees charged to sellers for each sale made on its marketplace. Additionally, its payment solution, Mercado Pago, contributes significantly to revenue by charging fees for processing payments both on and off its platform. The logistics arm, Mercado Envios, adds to the revenue by offering shipping solutions that attract fees from sellers opting for their services. Another growing revenue stream is Mercado Credito, which provides loans to both buyers and sellers, earning interest income. Partnerships with local and international businesses also play a role in expanding MercadoLibre's service offerings and revenue potential.
Mercadolibre Financial Statement Overview
Summary
Mercadolibre showcases strong financial performance with robust revenue growth and profitability, moderate leverage, and effective cash management. The company's strong growth trajectory is supported by its impressive net profit margin and healthy cash flow generation.Income Statement
Mercadolibre has shown strong revenue growth with a significant increase from $14.47 billion in 2023 to $18.64 billion in 2024. The gross profit margin is robust at 51.36%, and the net profit margin has improved to 10.25%. Both EBIT and EBITDA margins are healthy, indicating efficient operational performance. Overall, the company is demonstrating strong growth and profitability trends.85
Very Positive
Balance Sheet
The balance sheet reflects a good equity position with a debt-to-equity ratio of 0.26, indicating moderate leverage. The return on equity (ROE) is impressive at 43.92%, highlighting strong profitability relative to equity. The equity ratio stands at 17.27%, suggesting a stable financial structure, although room for improvement exists in terms of increasing equity relative to total assets.78
Positive
Cash Flow
Mercadolibre's cash flow is strong, with free cash flow showing significant growth. The operating cash flow to net income ratio is favorable at 4.14, indicating efficient cash generation relative to net income. The free cash flow to net income ratio complements this at 4.14, underscoring healthy cash management practices. The company is effectively converting its income into cash, supporting its growth trajectory.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 8.83B | 20.78B | 14.47B | 10.54B | 7.07B | 3.97B | Gross Profit |
| 4.02B | 9.58B | 7.21B | 5.16B | 3.01B | 1.71B | EBIT |
| 572.69M | 2.63B | 1.82B | 1.03B | 440.70M | 230.46M | EBITDA |
| 884.70M | 3.25B | 2.29B | 1.36B | 614.28M | 269.30M | Net Income Common Stockholders |
| 236.90M | 1.91B | 987.00M | 482.00M | 83.00M | -707.00K |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 9.18B | 9.18B | 7.33B | 3.03B | 2.79B | 2.46B | Total Assets |
| 25.20B | 25.20B | 17.65B | 13.74B | 10.10B | 6.53B | Total Debt |
| 6.85B | 6.85B | 5.33B | 5.41B | 3.98B | 1.71B | Net Debt |
| 4.21B | 4.21B | 2.78B | 3.50B | 1.40B | -148.28M | Total Liabilities |
| 20.84B | 20.84B | 14.57B | 11.91B | 8.57B | 4.87B | Stockholders Equity |
| 4.35B | 4.35B | 3.07B | 1.83B | 1.53B | 1.65B |
| Cash Flow | Free Cash Flow | ||||
| 1.08B | 7.06B | 4.63B | 2.48B | 355.55M | 935.41M | Operating Cash Flow |
| 1.64B | 7.92B | 5.14B | 2.94B | 965.04M | 1.18B | Investing Cash Flow |
| -3.90B | -8.29B | -3.45B | -3.87B | -1.60B | -252.18M | Financing Cash Flow |
| 3.27B | 1.96B | -267.00M | 916.00M | 1.93B | 242.27M |
Mercadolibre Technical Analysis
Positive
2059.87
Price Trends
1912.03
Positive
1948.50
Positive
1883.10
Positive
Market Momentum
56.14
Positive
51.44
Neutral
17.41
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MELI, the sentiment is Positive. The current price of 2059.87 is below the 20-day moving average (MA) of 2086.89, above the 50-day MA of 1912.03, and above the 200-day MA of 1883.10, indicating a neutral trend. The MACD of 56.14 indicates Positive momentum. The RSI at 51.44 is Neutral, neither overbought nor oversold. The STOCH value of 17.41 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MELI.
Mercadolibre Risk Analysis
Mercadolibre disclosed 42 risk factors in its most recent earnings report. Mercadolibre reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Mercadolibre Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $312.51B | 18.26 | 12.08% | 0.75% | 4.28% | 28.42% | |
82 Outperform | $2.16T | 36.91 | 20.72% | ― | 10.99% | 91.61% | |
76 Outperform | $104.43B | 54.65 | 43.92% | ― | 43.56% | 91.72% | |
73 Outperform | $31.07B | 16.91 | 38.29% | 1.65% | 2.79% | -23.30% | |
63 Neutral | $5.25B | 20.86 | -39.97% | ― | 2.18% | 5.77% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% |
* Consumer Cyclical Sector Average
Performance Comparison
MELI
Mercadolibre
2,059.87
532.58
34.87%
AMZN
Amazon
203.80
29.68
17.05%
EBAY
eBay
66.67
17.53
35.67%
BABA
Alibaba
129.85
59.29
84.03%
ETSY
Etsy
49.46
-19.09
-27.85%
SHOP
Shopify
101.73
28.26
38.46%
Mercadolibre Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -0.77% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance by MercadoLibre with substantial revenue growth and user expansion. While there are concerns related to credit risks in Brazil and macroeconomic factors in Argentina, the overall outlook remains optimistic with continued investments in logistics, user experience, and financial services.Highlights
Record Revenue and Free Cash Flow
MercadoLibre achieved $21 billion in revenue and over $1 billion in free cash flow in 2024, demonstrating their ability to drive profitable growth while investing in long-term strategic objectives.
Significant Growth in Unique Buyers and Active Users
The platform surpassed 100 million unique buyers and 60 million monthly active users, reflecting trust and loyalty in MercadoLibre's ecosystem.
Expansion of Logistics Infrastructure
Investments in logistics led to record-breaking numbers of new buyers and improvements in logistics efficiency, with a 29% year-on-year increase in items shipped.
Credit Card Portfolio Growth
MercadoLibre issued 5.9 million new credit cards in 2024 and more than doubled its portfolio, positioning itself to become the largest digital bank in Latin America.
Innovation in User Experience
Developments such as virtual try-ons for makeup and standardized filters in fashion improved the purchasing experience.
Advertising Revenue Growth
There was a 50 basis point increase in advertising revenue as a percentage of GMV, driven by strengthening relationships with brands and agencies.
Lowlights
Cautious Approach to Credit in Brazil
Due to a rising interest rate environment, MercadoLibre reduced the issuance of micro cards and tightened payback periods to manage risk.
Margin Volatility in Brazil
Contribution margin in Brazil was down slightly year-over-year, partially due to higher provisions for the credit card build-out.
Economic and Regulatory Challenges in Argentina
Despite strong growth, MercadoLibre remains cautious about the macroeconomic volatility and regulatory environment in Argentina.
Company Guidance
In the recent earnings call, MercadoLibre reported robust financial performance for the fiscal year 2024, with significant growth in several key metrics. The company achieved a revenue of $21 billion and generated over $1 billion in free cash flow, demonstrating their ability to drive profitable growth while maintaining strategic investments. Notably, MercadoLibre surpassed 100 million unique buyers in its marketplace and 60 million monthly active users on its fintech platform for the first time. The company issued 5.9 million new credit cards, doubling its portfolio, and saw a 74% year-on-year acceleration in its credit portfolio. Additionally, the logistics operations reached record productivity levels with a 29% year-on-year increase in items shipped, while cost per package either declined or rose below inflation across major geographies. MercadoLibre's strategic focus remains on enhancing its e-commerce and fintech offerings, leveraging the relatively low penetration of e-commerce in Latin America and the growing demand for better financial products.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.