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What's in the Cards for MercadoLibre (MELI) in Q2 Earnings?

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MercadoLibre, Inc. (MELI - Free Report) is set to report second-quarter 2021 results on Aug 4.

For the second quarter, the Zacks Consensus Estimate for sales is pegged at $1.5 billion, indicating growth of 70.9% from the prior-year quarter’s reported figure.

The consensus mark for second-quarter earnings is pegged at 9 cents per share, indicating a decline of 91.9% from the year-ago quarter’s reported figure.

Factors to Consider

MercadoLibre’s strength across the marketplace and non-marketplace businesses is expected to get reflected in the second-quarter results.

The company’s growing initiatives toward strengthening the fintech business are expected to have driven total payment volumes (TPV) in the quarter under review. This, in turn, is expected to have contributed to its second-quarter performance.

MercadoLibre, Inc. Price and EPS Surprise

 

MercadoLibre, Inc. Price and EPS Surprise

MercadoLibre, Inc. price-eps-surprise | MercadoLibre, Inc. Quote

MercadoLibre’s strengthening key offerings, especially online-to-offline offerings, are expected to have consistently aided the top line in the to-be-reported quarter.

Its growing initiatives toward fortifying its fintech business are anticipated to have been major positives. The increasing adoption of MercadoPago on the back of well-performing merchant servicesand mobile wallet business is expected to have driven the company’s total payment volume in the second quarter.

Robust mobile-point-of-sale services are anticipated to have bolstered transactions per unique active device in the soon-to-be-reported quarter.

Strong wallet services are anticipated to have boosted the company’s in-store QR payment volume inthe second quarter. A robust Mercado Pago is likely to have contributed to TPV in the to-be-reported quarter.

Apart from this, MercadoLibre’s efforts to bolster the e-commerce business by promoting branding and loyalty are likely to have driven growth in its unique buyer base in the second quarter amid the pandemic.

Strengthening shipping services are expected to have helped the company in delivering an enhanced shopping experience to customers in the quarter to be reported. It is likely to have contributed to shipment growth via MercadoEnvios in the quarter under review.

Rising investment by the company in its logistics services is likely to have supported the performance of its delivery system in the quarter to be reported.

However, increasing warehousing costs of managed networks and expenses related to infrastructure transition on public clouds are likely to have impacted its profitability in the quarter under review.

Mounting interest accrual on convertible bonds and headwinds related to foreign exchange fluctuations are anticipated to have been major concerns.

The impacts of rising competitive pressure from e-commerce giants are expected to get reflected in the second-quarter results.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for MercadoLibrethis time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

MercadoLibre has an Earnings ESP of -147.06% and a Zacks Rank #3.

Stocks to Consider

Here are some stocks that you may consider as our model shows that these have the right combination of elements to beat on earnings this season.

Agilent Technologies (A - Free Report) has an Earnings ESP of +1.49% and a Zacks Rank of 2 at present.

Avnet (AVT - Free Report) has an Earnings ESP of +9.82% and it sports a Zacks Rank of 1 at present.

CyberArk Software (CYBR - Free Report) has an Earnings ESP of +37.93% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.