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MercadoLibre (MELI) Gains As Market Dips: What You Should Know

Zacks Equity Research
·2-min read

MercadoLibre (MELI) closed the most recent trading day at $1,856.34, moving +0.2% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.58%.

Prior to today's trading, shares of the operator of an online marketplace and payments system in Latin America had gained 3.21% over the past month. This has outpaced the Retail-Wholesale sector's gain of 0.47% and the S&P 500's gain of 0.16% in that time.

Investors will be hoping for strength from MELI as it approaches its next earnings release. The company is expected to report EPS of $1.27, up 353.57% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.84 billion, up 64.87% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.74 per share and revenue of $6.99 billion. These totals would mark changes of +3525% and +75.96%, respectively, from last year.

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Any recent changes to analyst estimates for MELI should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. MELI currently has a Zacks Rank of #1 (Strong Buy).

Looking at its valuation, MELI is holding a Forward P/E ratio of 676.14. This represents a premium compared to its industry's average Forward P/E of 49.56.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 206, which puts it in the bottom 19% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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