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MercadoLibre (MELI) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, MercadoLibre (MELI - Free Report) closed at $1,550.49, marking a -1.95% move from the previous day. This change lagged the S&P 500's daily loss of 0.16%. Meanwhile, the Dow lost 0.39%, and the Nasdaq, a tech-heavy index, added 0.09%.

Wall Street will be looking for positivity from MELI as it approaches its next earnings report date. In that report, analysts expect MELI to post earnings of $0.40 per share. This would mark year-over-year growth of 190.91%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.2 billion, up 83.49% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.06 per share and revenue of $5.93 billion. These totals would mark changes of +2675% and +49.15%, respectively, from last year.

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

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 42.78% lower. MELI currently has a Zacks Rank of #5 (Strong Sell).

In terms of valuation, MELI is currently trading at a Forward P/E ratio of 754.07. This represents a premium compared to its industry's average Forward P/E of 50.4.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 228, putting it in the bottom 11% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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