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

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In the latest trading session, MercadoLibre (MELI - Free Report) closed at $1,435.57, marking a -1.13% move from the previous day. This move lagged the S&P 500's daily gain of 0.6%. At the same time, the Dow added 1.46%, and the tech-heavy Nasdaq lost 0.04%.

Heading into today, shares of the operator of an online marketplace and payments system in Latin America had lost 22.68% over the past month, lagging the Retail-Wholesale sector's loss of 6.6% and the S&P 500's loss of 0.8% in that time.

MELI will be looking to display strength as it nears its next earnings release. In that report, analysts expect MELI to post earnings of $0.40 per share. This would mark year-over-year growth of 190.91%. Our most recent consensus estimate is calling for quarterly revenue of $1.16 billion, up 77.2% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.43 per share and revenue of $5.86 billion. These totals would mark changes of +3137.5% and +47.47%, respectively, from last year.

Any recent changes to analyst estimates for MELI should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Over the past month, the Zacks Consensus EPS estimate has moved 35.15% lower. MELI is currently a Zacks Rank #5 (Strong Sell).

Looking at its valuation, MELI is holding a Forward P/E ratio of 597.53. This valuation marks a premium compared to its industry's average Forward P/E of 52.34.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 219, putting it in the bottom 15% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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